Page:United States Statutes at Large Volume 94 Part 2.djvu/1010

 94 STAT. 2288

PUBLIC LAW 96-477—OCT. 21, 1980

extent as if it were a registered closed-end investment company, except that nothing in that section shall be deemed to prohibit— "(1) any loan to a director, officer, or employee of, or general partner in, a business development company for the purpose of purchasing securities of such company as part of an executive compensation plan, if such loan meets the requirements of section 57(j); or "(2) any loan to a company controlled by a business development company, which companies could be deemed to be under common control solely because a third person controls such business development company. "DISTRIBUTION AND REPURCHASE OF SECURITIES

15 USC 80a-62. "SEC. 63. Notwithstanding the exemption set forth in section 6(f), usr'80 -2^^' ^^ section 23 shall apply to a business development company to the same extent as if it were a registered closed-end investment company, except as follows: "(1) The prohibitions of section 23(a)(2) shall not apply to any company which (A) is a wholly-owned subsidiary of, or directly or indirectly controlled by, a business development company, and (B) immediately after the issuance of any of its securities for property other than cash or securities, will not be an investment 15 USC 80a-3. company within the meaning of section 3(a). "(2) Notwithstanding the provisions of section 23(b), a business development company may sell any common stock of which it is the issuer at a price below the current net asset value of such stock, and may sell warrants, options, or rights to acquire any such common stock at a price below the current net asset value of such stock, if— "(A) the holders of a majority of such business development company's outstanding voting securities, and the holders of a majority of such company's outstanding voting securities that are not affiliated persons of such company, approved such company's policy and practice of making such sales of securities at the last annual meeting of shareholders or partners within one year immediately prior to any such sale, except that the shareholder approval requirements of this subparagraph shall not apply to the initial public offering by a business development company of its securities; "(B) a required majority (as defined in section 57(o)) of the directors of or general partners in such business development company have determined that any such sale would be in the best interests of such company and its shareholders or partners; and "(C) a required majority (as defined in section 57(o)) of the directors of or general partners in such business development company, in consultation with the underwriter or underwriters of the offering if it is to be underwritten, have determined in good faith, and as of a time immediately prior to the first solicitation by or on behalf of such company of firm commitments to purchase such securities or immediately prior to the issuance of such securities, that the price at which such securities are to be sold is not less than a price which closely approximates the market value of those securities, less any distributing commission or discount. "(3) A business development company may sell any common stock of which it is the issuer at a price below the current net

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