12 2 STA T .37 7 9PUBLIC LA W 11 0– 3 4 3 —O CT. 3 , 200 8ora r e a s o n a bl e i n t erest rate p re m i u m , int h e c ase o f a d ebt instrument
and ( ii ) to pro v ide additional protection for the ta x pa y er a g ainst losses from sale of assets by the S ecretary under this A ct and the administrative expenses of the T A RP. ( B )A UTHORI T Y TO SEL L,E X ER C ISE, OR SURRE ND ER. — The Secretary may sell, exercise, or surrender a w arrant or any senior debt instrument received under this sub - section, based on the conditions established under subpara- graph (A). ( C ) CON V ERSION.—The warrant shall provide that if, after the warrant is received by the Secretary under this subsection, the financial institution that issued the warrant is no longer listed or traded on a national securities exchange or securities association, as described in para- graph ( 1 )(A), such warrants shall convert to senior debt, or contain appropriate protections for the Secretary to ensure that the Treasury is appropriately compensated for the value of the warrant, in an amount determined by the Secretary. ( D ) PROTECTIONS.—Any warrant representing securi- ties to be received by the Secretary under this subsection shall contain anti-dilution provisions of the type employed in capital mar k et transactions, as determined by the Sec- retary. Such provisions shall protect the value of the securi- ties from market transactions such as stock splits, stock distributions, dividends, and other distributions, mergers, and other forms of reorgani z ation or recapitalization. ( E ) EXERCISE P RICE.—The exercise price for any war- rant issued pursuant to this subsection shall be set by the Secretary, in the interest of the taxpayers. ( F )SU F FICIENCY.—The financial institution shall guar- antee to the Secretary that it has authorized shares of nonvoting stock available to fulfill its obligations under this subsection. Should the financial institution not have sufficient authorized shares, including preferred shares that may carry dividend rights e q ual to a multiple number of common shares, the Secretary may, to the extent nec- essary, accept a senior debt note in an amount, and on such terms as will compensate the Secretary with equiva- lent value, in the event that a sufficient shareholder vote to authorize the necessary additional shares cannot be obtained. ( 3 ) EXCEPTIONS.— (A) DE M INIMIS.—The Secretary shall establish de minimis exceptions to the requirements of this subsection, based on the size of the cumulative transactions of troubled assets purchased from any one financial institution for the duration of the program, at not more than $ 1 0 0,000,000. (B) O THER EXCEPTIONS.—The Secretary shall establish an exception to the requirements of this subsection and appropriate alternative requirements for any participating financial institution that is legally prohibited from issuing securities and debt instruments, so as not to allow cir- cumvention of the requirements of this section. Anti-d i lu ti o n pr o v i s ions .
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