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and loan guarantees, either directly or in cooperation with
other lenders, to small- and medium-sized qualified con-
cerns based in the United States, and for operations lo-
cated in the United States, in accordance with this title.
SEC. 303. TERMS AND CONDITIONS.
Loans and loan guarantees made under section 302
shall be in such form and manner and under such terms
and conditions as the Corporation may prescribe, and shall
be subject to the following terms and conditions:
(1) Loans awarded or guaranteed shall be for
sound financing of development, demonstration, uti-
lization, or commercialization of technologies.
(2) Loans shall only be awarded or guaranteed
if the Corporation finds that—
(A) sufficient collateral, which may include
both tangible and intangible assets, is pledged;
or
(B) the borrower is sufficiently financially
sound, to reasonably ensure repayment.
(3) Loans awarded or guaranteed shall be sen-
ior to any other debt obligations of the borrower, ex-
cept to the extent that the Corporation considers
necessary to accommodate the borrower’s ability to
raise sufficient debt or equity capital from other
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non-Federal sources to pay the balance of eligible
project costs that are not covered by such loans.
(4) Interest on a loan, or portion of a loan,
awarded or guaranteed by the Corporation under
this title shall be at a rate, at the time such loan
is made, to equal the then current average market
yield on outstanding debt obligations of the United
States with remaining periods to maturity com-
parable to the maturity of such loan, plus an addi-
tional charge of up to 1 percent applied by the Cor-
poration to cover expected defaults and reasonable
administrative costs of carrying out this title.
(5) Except as provided in paragraph (6), the
maturity of loans awarded or guaranteed under this
subtitle may not be less than 2 years or greater
than—
(A) 10 years; or
(B) the useful life of property, plant,
equipment, or other assets, as determined by
the Corporation, which have been pledged as
collateral for such loan,
whichever is greater.
(6) The Corporation may extend the maturity
of or renew a loan or extend the guarantee of a loan
for additional periods, not to exceed 5 years, only if
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such extension or renewal will aid in the orderly liq-
uidation of such loan.
(7) Payment of interest on direct loans made by
the Corporation under this title may be deferred by
the borrower, upon approval by the Corporation,
only to the extent that the borrower has established
to the satisfaction of the Corporation that the bor-
rower has not realized sufficient earnings and re-
turns of capital to make such payment without in-
curring undue financial hardship, and that there is
a reasonable prospect that such loan and interest
thereon will be repaid.
(8) The Corporation may guarantee payment of
up to 100 percent of principal and interest on a loan
made under section 302.
(9) The Corporation may establish, charge, and
regulate fees to cover loan origination and servicing
costs that are reasonable and necessary.
SEC. 304. EQUITY INSTRUMENTS PURCHASE OR GUARAN-
TEE AUTHORITY.
(a) AUTHORITY TO PURCHASE AND GUARANTEE EQ-
UITY INSTRUMENTS.—For the purposes of this Act, the
Corporation may purchase or commit to purchase
nonvoting equity instruments, with or without equity war-
rants, or commit to guarantee, the payment of 100 percent
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of the redemption price of, and dividends on, such equity
instruments of United States based consortia, private
United States businesses, and educational institutions
participating in joint projects with private United States
businesses for the development and commercialization in
the United States of patents, licenses, processes, and tech-
nologies—
(1) owned or held in whole or part by Federal
departments, agencies, or government controlled cor-
porations,
(2) developed in Federal laboratories,
(3) arising in the course of federally funded re-
search at educational institutions, other units of gov-
ernment, or with private concerns, or
(4) which are made available by private con-
cerns.
(b) TERMS AND CONDITIONS OF EQUITY INSTRU-
MENTS—
(1) Guarantees and purchases of equity instru-
ments, or commitments to make such guarantees
and purchases, under this section may be made on
such terms and conditions as the Corporation shall
set forth in contract and to protect the interests of
taxpayers and the United States in the event of de-
fault or otherwise.
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(2)(A) Except as provided in subparagraph (B),
equity instruments purchased or guaranteed under
this section shall be senior in priority for all pur-
poses to all non-Federal equity interests in a licensee
unless the Corporation, in the exercise of reasonable
investment prudence and in considering the financial
soundness of the qualified concern, determines oth-
erwise.
(B) The equity interests of a university or con-
sortium of universities, or of a State or instrumen-
tality of a State, in a qualified concern shall be
equal in priority to Federal equity interests for all
purposes unless the Corporation, in the exercise of
reasonable investment prudence and in considering
the financial soundness of the qualified concern, de-
termines otherwise.
(3) Equity instruments purchase or guaranteed
under this section shall be redeemed not later than
10 years after their date of issuance for an amount
equal to 100 percent of the original issue price plus
any accrued and unpaid dividends. In order to facili-
tate the orderly liquidation of a qualified concern’s
investments, redemption of such equity instruments
may be extended by mutual consent for no more
than 5 years beyond such expiration date.
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(4) The payment of dividends on equity instru-
ments purchased or guaranteed under this section
may be deferred by the qualified concern until such
time as, and to the extent that, the qualified concern
realizes earnings and returns of capital available for
distribution. Accumulated and unpaid dividends on
such equity instruments shall be paid by the quali-
fied concern before or at the time of redemption of
the equity instruments and before any distribution
of net realized earnings and returns of capital of the
qualified concern to its non-Federal equity investors.
(5) For purposes of this subsection, the term
‘‘dividends’’ means dividends on preferred stock and
returns on preferred limited partnership interests or
other similar securities.
(c) USE OF PAYMENTS.—Amounts received by the
Corporation from the payment of dividends and the re-
demption of equity instruments pursuant to this section
shall be divided as follows:
(1) 60 percent of such amounts shall be depos-
ited in the Technology Transfer Investment Fund
and shall be available solely for carrying out the pur-
poses of this Act.