sistent with SBA's statutory purpose to permit the lessee to continue to occupy the property. [Rev. 1, 34 FR 14881, Sept. 27, 1969, as amended by Amdt. 1, 36 FR 3185, Feb. 19, 1971; Amdt. 2, 39 FR 11417, Mar. 28, 1974] § 106.13 Assignments, subleases and surrenders after occupancy. (a) The interest of the lessee in the leased premises shall not be voluntarily assigned or transferred by corporate merger or capital stock transfer to a new lessee without the prior written consent of the lessor and the in surer. (b) The lessee shall not sublease the entire premises or any portion thereof without the prior written consent of the lessor and the insurer. (c) The lessor shall not consent to an assignment or sublease by the tenant without the prior written consent of the insurer. (d) If the lessor gives consent in violation of paragraph (c) of this section, the policy of lease guarantee insurance shall be suspended for the remainder of the term of the assigned lease or for the term of the sublease, regardless of whether the entire premises are subleased. (e) In the case of a transfer by assignment or sublease of the leasehold estate or any portion thereof to a new tenant, a lessor who desires to retain the insurance of the rent in its original amount by obtaining the insurer's consent endorsed on the policy shall submit to the insurer such information concerning the assignee or sublessee as the insurer may require. (f) If the assignee or sublessee is a small business concern and proposes to conduct business operations within the premises and the risks of management and financial structure have not increased, the insurer may consent to the assignment or sublease without payment of a new premium. (g) If the insurer finds that the risk of the new management or financial structure of the assignee or sublessee is an increased risk, the insurer shall treat the assignment or sublease as a new lease and shall give consent only if the insurer is paid a premium based on the original rent or the rent of the sublease, the remaining months of the policy term and the prevailing rate schedule at the time the insurer's consent is requested. (h) If the lessee, without default voluntarily vacates or surrenders possession of the leased premises to the lessor or to any other occupant (including any corporate survivor of a corporate merger with the lessee) with the consent of the lessor, the insurance shall terminate. § 106.14 Acquisition of premises by insured lessee. If during the term of an insured lease an insured lessee exercises an option to purchase the premises or purchases an undivided interest in the premises or acquires any of a corporate lessor's capital stock, the initial amount of insured rent shall be reduced by an amount equivalent to the lessee's acquired interest in the premises or in the capital stock of the lessor. § 106.15 Acquisition of lessee by lessor. If, during the term of an insured lease, the lessor, its subsidiaries or affiliates or any individual in control of the lessor acquires an interest in the lessee, the initial amount of insured rent shall be reduced by an amount equivalent to the acquired interest in the lessee. § 106.16 Effect of condemnation and casualty losses on insurance. (a) In the event the property described in the lease which is the subject of the insurance is totally condemned or totally destroyed, the insurance is terminated as of the date of title vesting in the condemnor or as of the date of the casualty loss. (b) In the event of partial condemnation or partial casualty losses, the amount of insurance is abated by the ratio which the minimum rent as abated by the terms of the lease bears to the guaranteed or insured minimum rent. § 106.17 Lease guarantee administration. (a) Direct guarantees. All policies of insurance which are issued directly by SBA will be serviced by SBA. (b) Participation guarantees. All policies of insurance which are issued by a participant shall be serviced by the participant. § 106.18 Rights and obligations of assignees of the lease rerental guarantee insurance policy. An assignee of a lease rental guarantee insurance policy becomes a loss payee for its interest in rental payments made by the insurer after default by the tenant through an assignment of interest endorsement to the policy. Such rental payments will be made only when the lessor, or the assignee acting as lessor, is in compliance with the provisions of the policy and § 106.11 of these regulations. [Rev. 1, Amdt. 2, 39 FR 11417, Mar. 28, 1974] 107.802 Other laws. 107.803 Operations under Act. 107.804 Identification as an SBIC. 107.805 107.806 Consideration for issuance of Li Retention of investments. censee securities. 107.807 Purchases of securities from another Licensee. 107.808 Deposits and investment of idle funds. 107.809 Investment Adviser/Manager. 107.810 Assets in liquidation. 107.811 [Reserved] 107.812 Financing changes of ownership. 107.813 Section 301(d) Licensee wholly or partly owned by Licensee companies. RESTRICTED ACTIVITIES 107.901 Control of Small Concern. 107.902 Voluntary capital decrease. 107.903 Mergers, consolidations, and reorganizations. 107.904 Financing of farm land purchases. 107.205 Leverage for section 301(d) Licens 107.1001 107.1002 ees. FINANCING OF SMALL CONCERNS (EQUITY CAPITAL FINANCING; LONG-TERM LOANS; GUARANTIES AND COMMITMENTS) 107.301 General. PROHIBITIONS Prohibited uses of funds. 107.1003 Inactive Licensees. 107.1004 Conflicts of interests. 107.1005 Disposition of assets to Licensee's Associates or to competitors of Portfolio sistent with SBA's statutory purpose to permit the lessee to continue to occupy the property. [Rev. 1, 34 FR 14881, Sept. 27, 1969, as amended by Amdt. 1, 36 FR 3185, Feb. 19, 1971; Amdt. 2, 39 FR 11417, Mar. 28, 1974] § 106.13 Assignments, subleases and surrenders after occupancy. (a) The interest of the lessee in the leased premises shall not be voluntarily assigned or transferred by corporate merger or capital stock transfer to a new lessee without the prior written consent of the lessor and the insurer. (b) The lessee shall not sublease the entire premises or any portion thereof without the prior written consent of the lessor and the insurer. (c) The lessor shall not consent to an assignment or sublease by the tenant without the prior written consent of the insurer. (d) If the lessor gives consent in violation of paragraph (c) of this section, the policy of lease guarantee insurance shall be suspended for the remainder of the term of the assigned lease or for the term of the sublease, regardless of whether the entire premises are subleased. (e) In the case of a transfer by assignment or sublease of the leasehold estate or any portion thereof to a new tenant, a lessor who desires to retain the insurance of the rent in its original amount by obtaining the insurer's consent endorsed on the policy shall submit to the insurer such information concerning the assignee or sublessee as the insurer may require. (f) If the assignee or sublessee is a small business concern and proposes to conduct business operations within the premises and the risks of management and financial structure have not increased, the insurer may consent to the assignment or sublease without payment of a new premium. (g) If the insurer finds that the risk of the new management or financial structure of the assignee or sublessee is an increased risk, the insurer shall treat the assignment or sublease as a new lease and shall give consent only if the insurer is paid a premium based on the original rent or the rent of the sublease, the remaining months of the policy term and the prevailing rate schedule at the time the insurer's consent is requested. (h) If the lessee, without default voluntarily vacates or surrenders possession of the leased premises to the lessor or to any other occupant (including any corporate survivor of a corporate merger with the lessee) with the consent of the lessor, the insurance shall terminate. § 106.14 Acquisition of premises by insured lessee. If during the term of an insured lease an insured lessee exercises an option to purchase the premises or purchases an undivided interest in the premises or acquires any of a corporate lessor's capital stock, the initial amount of insured rent shall be reduced by an amount equivalent to the lessee's acquired interest in the premises or in the capital stock of the lessor. § 106.15 Acquisition of lessee by lessor. If, during the term of an insured lease, the lessor, its subsidiaries or affiliates or any individual in control of the lessor acquires an interest in the lessee, the initial amount of insured rent shall be reduced by an amount equivalent to the acquired interest in the lessee. § 106.16 Effect of condemnation and casualty losses on insurance. (a) In the event the property described in the lease which is the subject of the insurance is totally condemned or totally destroyed, the insurance is terminated as of the date of title vesting in the condemnor or as of the date of the casualty loss. (b) In the event of partial condemnation or partial casualty losses, the amount of insurance is abated by the ratio which the minimum rent as abated by the terms of the lease bears to the guaranteed or insured minimum rent. § 106.17 Lease guarantee administration. (a) Direct guarantees. All policies of insurance which are issued directly by SBA will be serviced by SBA. (b) Participation guarantees. All policies of insurance which are issued by a participant shall be serviced by the participant. § 106.18 Rights and obligations of assignees of the lease rerental guarantee insurance policy. An assignee of a lease rental guarantee insurance policy becomes a loss payee for its interest in rental payments made by the insurer after default by the tenant through an assignment of interest endorsement to the policy. Such rental payments will be made only when the lessor, or the assignee acting as lessor, is in compliance with the provisions of the policy and § 106.11 of these regulations. [Rev. 1, Amdt. 2, 39 FR 11417, Mar. 28, 1974] censee securities. Retention of investments. 107.807 Purchases of securities from another Licensee. 107.808 Deposits and investment of idle funds. 107.809 Investment Adviser/Manager. 107.810 Assets in liquidation. 107.811 [Reserved] 107.812 Financing changes of ownership. 107.813 Section 301(d) Licensee wholly or partly owned by Licensee companies. RESTRICTED ACTIVITIES 107.901 Control of Small Concern. 107.902 Voluntary capital decrease. 107.903 Mergers, consolidations, and reorganizations. 107.904 Financing of farm land purchases. PROHIBITIONS 107.1001 Prohibited uses of funds. 107.1002 [Reserved] 107.1003 Inactive Licensees. 107.1004 Conflicts of interests. 107.1005 Disposition of assets to Licensee's Associates or to competitors of Portfolio Concern. 107.1301 Exemptions. 107.1302 Savings clause. APPENDIX A-AUDIT GUIDE FOR SMALL BUSINESS INVESTMENT COMPANIES APPENDIX B-GUIDE FOR THE PREPARATION OF THE ANNUAL REPORT APPENDIX C-SYSTEM OF ACCOUNT CLASSIFICATION AUTHORITY: Sec. 308(c), 72 Stat. 694, as amended (15 U.S.C. 687(c)); sec. 312, 78 Stat. 147 (15 U.S.C. 687(d); sec. 315, 80 Stat. 1364 (15 U.S.C. 687g), unless otherwise noted. SOURCE: Rev. 5, 38 FR 30837, Nov. 7, 1973, unless otherwise noted. with the Office of the Federal Register with the original document. Copies may be obtained from SBA. [Rev. 5, 38 FR 30837, Nov. 7, 1973; 38 FR 34988, Dec. 21, 1973] DEFINITIONS § 107.3 Definition of terms. 2 Act. "Act" means the Small Business Investment Act of 1958, as amended. Articles. "Articles" means articles of incorporation or charter for a Corporate Licensee and the partnership agreement or certificate for an Unincorporated Licensee. Assistance. "Assistance" or "Assisted" means Financing of or Management Services rendered to a Small Concern by a Licensee pursuant to the Act and these regulations. Associate of a Licensee. "Associate of a Licensee" means: (a)(1) An officer, director, employee or agent of a corporate Licensee; (2) a Control Person, employee or agent of an Unincorporated Licensee; (3) a manager or Investment Adviser of any Licensee, which terms (manager or Investment Adviser) include any Person contracting with a Control Person of an Unincorporated Licensee to serve as manager or Investment Adviser to such Licensee, or (4) any person regularly serving a Licensee on retainer in the capacity of attorney at law; or (b) Any Person owning or controlling, directly or indirectly, ten percent or more of any class of stock of a corporate Licensee or of the partnership capital of an Unincorporated Licensee; (c) Any officer, director, partner, manager, or employee of any associate described in paragraph (a) or (b): Provided, however, That subject to paragraph (b) above, a Person with no other relationship to any Associate described in paragraph (a) or (b) but that of a limited partner shall not be considered an Associate of such Associate. (d) Any person which directly or indirectly Controls or is Controlled by, or is under common Control with, a Licensee or any person described in "Defined terms are capitalized hereafter. |