Aero Performance Products Inc (fka AERP)

[Lordstacey3]

Yes I believe you are correct, here is section 61.
Link: http://www.sec.gov/about/laws/ica40.pdf

107 INVESTMENT COMPANY ACT OF 1940 Sec. 61
CAPITAL STRUCTURE
SEC. 61. ø80a–60¿ (a) Notwithstanding the exemption set forth
in section 6(f), section 18 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 asset coverage requirements of section 18(a)(1) (A)
and (B) applicable to business development companies shall be
200 per centum.
(2) Notwithstanding section 18(c), a business development
company may issue more than one class of senior security representing
indebtedness.
(3) Notwithstanding section 18(d)—
(A) a business development company may issue warrants,
options, or rights to subscribe or convert to voting
securities of such company, accompanied by securities, if—
(i) such warrants, options, or rights expire by
their terms within ten years;
(ii) such warrants, options, or rights are not separately
transferable unless no class of such warrants,
options, or rights and the securities accompanying
them has been publicly distributed;
(iii) the exercise or conversion price is not less
than the current market value at the date of issuance,
or if no such market value exists, the current net asset
value of such voting securities; and
(iv) the proposal to issue such securities is authorized
by the shareholders or partners of such business
development company, and such issuance is approved
by the required majority (as defined in section 57(o))
of the directors of or general partners in such company
on the basis that such issuance is in the best interests
of such company and its shareholders or partners;
(B) a business development company may issue, to its
directors, officers, employees, and general partners, warrants,
options, and rights to purchase voting securities of
such company pursuant to an executive compensation
plan, if—
(i)(I) in the case of warrants, options, or rights
issued to any officer or employee of such business
development company (including any officer or employee
who is also a director of such company), such
securities satisfy the conditions in clauses (i), (iii), and
(iv) of subparagraph (A); or (II) in the case of warrants,
options, or rights issued to any director of such
business development company who is not also an officer
or employee of such company, or to any general
partner in such company, the proposal to issue such
securities satisfies the conditions in clauses (i) and (iii)
of subparagraph (A), is authorized by the shareholders
or partners of such company, and is approved by order
of the Commission, upon application, on the basis that
the terms of the proposal are fair and reasonable and
Sec. 61 INVESTMENT COMPANY ACT OF 1940 108
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 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);
and
(C) a business development company may issue warrants,
options, or rights to subscribe to, convert to, or purchase
voting securities not accompanied by securities, if—
(i) such warrants, options, or rights satisfy the
conditions in clauses (i) and (iii) of subparagraph (A);
and
(ii) the proposal to issue such warrants, options,
or rights is authorized by the shareholders or partners
of such business development company, and such
issuance is approved by the required majority (as defined
in section 57(o)) of the directors of or general
partners in such company on the basis that such
issuance is in the best interests of the company and its
shareholders or partners.
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
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 wholly-owned 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 a senior security of such