1. (a) the term of the warrant does not exceed the life of the debt securities or 15 years, whichever is less;
2. (b) the number of shares of equity securities issuable upon exercise of the warrants does not exceed the number that could be purchased at the exercise price with the debt securities at face amount; and
3. (c) the exercise price is at least equal to the value of the equity securities calculated in the manner described in Section 260.140.50 of these rules on the date the warrant is issued.

Warrants to purchase equity securities may be issued to the purchasers of debt securities provided their issuance is necessary in order to obtain the debt financing and provided further:

Note: Authority cited: Section 25610, Corporations Code. Reference: Section 25140, Corporations Code.

History

1. Renumbering and amendment of former Section 260.140.43 to Section 260.140.44, and renumbering and amendment of former Section 260.140.42 to Section 260.140.43 filed 5-3-83; effective thirtieth day thereafter (Register 83, No. 19).