Browse Statutes

(1) Any security may be registered by qualification under the terms and conditions provided in this subsection by filing a registration statement which shall be signed by the issuer, its chief executive officer, its principal financial officer, its comptroller or principal accounting officer, and the majority of its board of directors or persons performing similar functions (or, if there is no board of directors or persons performing similar functions, by the majority of the persons or board having the power of management of the issuer). A registration statement shall be deemed effective only as to the securities specified therein as proposed to be offered.

(2) The registration statement shall contain the information specified in paragraph (1) of subsection (c) of this Code section and shall be accompanied by the documents specified in paragraph (2) of subsection (c) of this Code section except that the commissioner may by rules or regulations provide that any such information or document (other than the requirements with respect to financial statements provided for in paragraph (1) of subsection (c) of this Code section) need not be included with respect to any class of issuers or securities if he finds that the requirement of such information or document is inapplicable to such class and that disclosure fully adequate for the protection of investors is otherwise required to be included within the registration statement. If any accountant, attorney, engineer, or appraiser or any person whose profession gives authority to a statement made by him is named in the registration statement as having prepared an opinion referred to in the registration statement or as having certified any part of the registration statement or is named as having prepared or certified a report of valuation for use in connection with the registration statement, the written consent of such person to the references to him in the registration statement shall be filed with the commissioner prior to the effectiveness of the registration statement. Any such registration statement shall contain such other information and be accompanied by such other documents as the commissioner may by rules or regulations require as being necessary or appropriate in the public interest or for the protection of investors. Each registration statement which is filed under this subsection shall be accompanied by the payment of the filing fee prescribed in subsection (a) of Code Section 10-5-6, an issuer's bond required by subsection (b) of Code Section 10-5-6 and, if required under subsection (c) of Code Section 10-5-6, a consent to service of process meeting the requirements of Code Section 10-5-18. (3) A prospectus which is part of a registration statement effective under this subsection and which contains the information specified in paragraph (1) of subsection (c) of this Code section, except to the extent modified by rules or regulations promulgated by the commissioner as provided in paragraph (2) of this subsection, shall be delivered to any purchaser prior to or simultaneously with the execution by the purchaser of a written agreement to purchase, the delivery of a confirmation of sale, or the payment for securities offered by means of such prospectus, whichever occurs first.

(4)(A) Any person who purchases securities registered under this subsection from the issuer, any affiliate of such issuer, or underwriter shall have the unqualified and unwaivable right to rescind such purchase within 72 hours of the execution by such person of a written agreement to purchase, the delivery of a confirmation of sale, or the payment for such securities, whichever shall occur first. Such rescission shall be effective upon actual delivery or mailing of notice of rescission to the person specified in subparagraph (c)(1)(P) of this Code section.

(B) It shall be unlawful for any person specified in subparagraph (c)(1)(P) of this Code section as the person responsible for making any repayment required in this subparagraph to fail to return within seven days of receipt of notice of rescission any consideration received from a person exercising the right of rescission specified in subparagraph (A) of this paragraph. Any part of such consideration which consists of an obligation on the part of a person exercising said right of rescission which was entered into in connection with the transaction rescinded and which requires such person to make future payments to the issuer, affiliate of the issuer, or underwriter shall be marked canceled and shall be returned to such person exercising the right of rescission. Within seven days of receipt by the person exercising the right of rescission of all consideration given to the issuer, affiliate of such issuer, or underwriter in connection with the transaction rescinded, the person exercising the right of rescission shall deliver to the person specified in subparagraph (c)(1)(P) of this Code section any securities issued in connection with the transaction rescinded.

(C) Following receipt of notice of rescission by the person specified in subparagraph (c)(1)(P) of this Code section as the person responsible for making any repayment required in subparagraph (B) of this paragraph, it shall be unlawful for any agent of the issuer, of an affiliate of such issuer, or of an underwriter to contact such person exercising the right of rescission specified in subparagraph (A) of this paragraph for the purpose of influencing the person exercising the right of rescission to withdraw any notice of rescission or for the purpose of making further sales of any securities of such issuer until all consideration given to the issuer, affiliate of such issuer, or underwriter has been returned to such person exercising the right of rescission, as provided in subparagraph (B) of this paragraph.

(5) A registration statement under this subsection becomes effective when the commissioner so orders. (c) Registration statement.

(1) Every registration statement filed under subsection (b) of this Code section shall contain the following information:

(A) With respect to the issuer: its name, street address, form of organization and its telephone number; the state or foreign jurisdiction and date of its organization; the general character and location of its business; a description of its physical properties and equipment; and a statement of the general competitive conditions in the industry or business in which it is or will be engaged;

(B) With respect to every director and officer of the issuer or person occupying a similar status or performing similar functions: his name, address, and principal occupation for the past five years; any criminal convictions or pending criminal proceedings involving the sale of securities of any such person or any disciplinary action taken or pending against any such person by the Securities and Exchange Commission, the National Association of Securities Dealers, the commissioner, or any state securities regulatory authority; the amount of securities of the issuer beneficially owned by him as of a specified date within 30 days of the filing of the registration statement; and a statement (including price information) of all transactions by such person in securities of the issuer beneficially owned by him during the two years preceding such date; the amount of the securities covered by the registration statement to which he has indicated his intention to subscribe; and with respect to each such person and any affiliate of such person or affiliate of a person specified in subparagraph (E) or (F) of this paragraph, a description of any material interest in any material transaction with the issuer or any significant subsidiary effected within the past three years or proposed to be effected;

(C) With respect to any person named as serving or as having agreed to serve as an advisory director of the issuer or in a similar capacity: a description of the exact relationship that will exist between the issuer and such person; the compensation paid or to be paid to such person to serve in such capacity; the amount of time that such person will actually spend on the affairs of the issuer; and each such person shall file with the commissioner a written consent to the use of his name in the prospectus prior to the effectiveness of the registration statement;

(D) The remuneration paid during the past 12 months and estimated to be paid during the next 12 months, directly or indirectly, by the issuer (together with all predecessors, subsidiaries, and affiliates) to each of the three highest paid officers or directors of the issuer and to all those persons covered by subparagraph (B) of this paragraph in the aggregate;

(E) With respect to any person owning of record or beneficially, if known, 10 percent or more of the outstanding shares of any class of equity security of the issuer: the information specified in subparagraph (B) of this paragraph other than his occupation;

(F) With respect to every promoter if the issuer was organized within the past three years: the information specified in subparagraph (B) of this paragraph; any amount paid to him within that period or intended to be paid to him; and the consideration for any such payment;

(G) With respect to any person other than an issuer on whose behalf any part of the offering is to be made: his name and address; the amount of securities of the issuer beneficially owned by him as of the date of the filing of the registration statement; and a description of any material interest in any material transaction with the issuer or any significant subsidiary effected within the past three years or proposed to be effected;

(H) The capitalization (including short-term debt and long-term debt), both as of the latest practicable date within 90 days and as adjusted to give effect to the proposed offering, of the issuer and all subsidiaries whose financial statements are filed with the registration statement on either a consolidated or an individual basis, including a description of each security outstanding or being registered or otherwise offered, and a statement of the amount and kind of consideration (whether in the form of cash, physical assets, services, patents, good will, or anything else) for which the issuer or any subsidiary has issued any of its securities within the past two years or is obligated to issue any of its securities;

(I) The kind and amount of securities to be offered; the proposed offering price or the method by which it is to be computed; any variation therefrom at which any portion of the offering is to be made to any person or class of persons other than the underwriters, with a specification of any such person or class; the basis upon which the offering is to be made if otherwise than for cash; the estimated aggregate underwriting and selling discounts or commissions and finders' fees (including separately, cash, securities, contracts, or anything else of value to accrue to the underwriters or finders in connection with the offering) or, if the selling discounts or commissions are variable, the basis of determining them and their maximum and minimum amounts; the estimated aggregate amounts of other selling expenses, including legal, engineering, printing, and accounting charges; the name and address of every underwriter and every recipient of a finder's fee; and a description of the plan of distribution of the securities which are to be offered;

(J) The net estimated cash proceeds to be received by the issuer from the offering after deducting all estimated expenses of the offering; the purposes for which the proceeds are to be used by the issuer; the amount proposed to be used for each purpose; the proposed order of priority in which the proceeds will be used for the purposes stated in the event the offering is not pursuant to an underwriting agreement under which no securities will be sold unless all securities to be offered are sold; the amounts of any funds to be raised from other sources to achieve the purposes stated; and the nature of the sources of any such funds;

(K) In any case where the securities to be offered are to be sold in any manner except an underwriting agreement under which no securities will be sold unless all securities to be offered are sold and where the issuer of such securities:

(i) Has not had any substantial gross revenues from the sale of products or services or any substantial net income from any source for any fiscal year ended during the past three years; and

(ii) Has not succeeded and does not intend to succeed to any business which has had any substantial gross revenues from the sale of products or services or any substantial net income from any source for any fiscal year ended during the past three years,

the minimum amount of funds to be derived from the offering after expenses of the offering which the issuer reasonably believes to be necessary to enable the issuer to operate the business it proposes to conduct;

(L) A description of any stock options or other security options outstanding or to be created in connection with the offering, together with the amount of any such options held or to be held by every person required to be named in subparagraph (B), (E), (F), (G), or (I) of this paragraph and by any person who holds or will hold, after giving effect to the proposed offering, 10 percent or more of the securities subject to such options;

(M) The dates of, parties to, and general description concisely stated of every management or other material contract made or to be made otherwise than in the ordinary course of business if it is to be performed in whole or in part at or after the filing of the registration statement;

(N) A description of any pending litigation or proceeding to which the issuer is a party and which could materially adversely affect its business or assets (including any such litigation or proceeding known to be contemplated by governmental authorities);

(O) The following financial statements:

(i) A balance sheet of the issuer or a consolidated balance sheet of the issuer and its subsidiaries prepared in accordance with generally accepted accounting principles as of a date within 90 days prior to the filing of the registration statement and, if such balance sheet is not certified, also a certified balance sheet of the issuer or a certified consolidated balance sheet of the issuer and its subsidiaries prepared in accordance with generally accepted accounting principles as of a date not more than one year prior to the date of filing unless the last fiscal year of the issuer has ended within 90 days prior to the date of filing, in which case such certified balance sheet may be as of the end of the fiscal year preceding such last fiscal year;

(ii) A profit and loss statement, analysis of surplus, and a statement of source and application of funds of the issuer or consolidated statements of the issuer and its subsidiaries, all of which statements shall be certified and prepared in accordance with generally accepted accounting principles for each of the three fiscal years preceding the date of the most recent certified balance sheet filed and for the interim period, if any, between the close of the most recent of such fiscal years and the date of the most recent balance sheet filed and, with respect to the profit and loss statement, for the corresponding period of the preceding year, but statements for such interim and corresponding periods need not be certified; or, if the issuer and its predecessors have been in existence for less than three fiscal years, the profit and loss and other required statements for the periods for which it has been in existence; and

(iii) If a substantial part of the proceeds of the offering is to be applied to the purchase of any business, the same financial statements which would be required if that business were the registrant;

provided, however, if the issuer does not report its accounts in the normal course of its business on a consolidated basis, then it may furnish, in lieu of consolidated statements, individual statements for it and its majority owned subsidiaries, provided that, if any such financial statements are required to be certified, they shall be certified by an independent public accountant duly registered and in good standing as such under the laws of the place of his residence or principal office;

(P) On the inside back cover page in the case of a printed prospectus or the final page in the case of a prospectus reproduced by any other means, notices in a form satisfactory to the commissioner which shall provide a means of exercising the right of rescission provided in paragraph (4) of subsection (b) of this Code section and which shall be addressed to the commissioner and to the person responsible for making any repayment specified in subparagraph (b)(4)(B) of this Code section; and on the inside front cover page of the prospectus in the case of a printed prospectus or on the second page of the prospectus in the case of a prospectus reproduced by any other means, in boldface print or capital type the following legend:

ANY PERSON WHO PURCHASES THE SECURITIES OFFERED HEREBY SHALL HAVE THE UNQUALIFIED AND UNWAIVABLE RIGHT TO RESCIND SUCH PURCHASE WITHIN 72 HOURS OF THE EXECUTION OF A WRITTEN AGREEMENT TO PURCHASE ANY SECURITIES OFFERED HEREBY, THE DELIVERY OF A CONFIRMATION OF SALE, OR THE PAYMENT FOR ANY SECURITIES OFFERED HEREBY, WHICHEVER SHALL OCCUR FIRST.

RESCISSION MAY BE ACCOMPLISHED BY COMPLETING AND MAILING THE FORMS PROVIDED ON PAGE ... OF THIS PROSPECTUS.

(2) Every registration statement filed under subsection (b) of this Code section shall be accompanied by the following documents:

(A) A copy of the prospectus proposed to be used in complying with the requirements of paragraph (3) of subsection (b) of this Code section;

(B) A copy of any notice, circular, advertisement, sales literature, letter, or communication (if any such notice, circular, advertisement, sales literature, letter, or communication is to be used in connection with the offering) in respect of a security which states from whom a written prospectus meeting the requirements of paragraph (3) of subsection (b) of this Code section may be obtained and which does no more than identify the security, state the price thereof, state by whom orders will be executed, and contain such other information as the commissioner, by rules or regulations, deemed necessary or appropriate in the public interest and for the protection of investors and subject to such terms and conditions as may be prescribed therein, may permit;

(C) A specimen or copy of the security being registered; a copy of the issuer's articles of incorporation and bylaws or their substantial equivalents, as currently in effect; and a copy of any indenture or other instrument relating to the security to be registered;

(D) A signed opinion of legal counsel which shall state whether or not the security, when sold, will be legally issued, fully paid, and nonassessable and, if a debt security, a binding obligation of the issuer;

(E) A copy of any underwriting or selling group agreement pursuant to which the distribution is to be made;

(F) A copy of every management or other material contract referred to in subparagraph (c)(1)(H) of this Code section;

(G) A signed copy of any professional opinions or any reports or certifications specifically referred to in the prospectus;

(H) A copy of any literature concerning the issuer or the offering given to any persons directly engaged in the sale of the securities; and

(I) A written consent of each director of the issuer or of any person occupying a similar status or performing a similar function to the use of his name in the prospectus unless such director or person has signed the registration statement.

(d) Registration by notification.

(1) Any security whose issuer or any predecessors have been in continuous operation for at least five years may be registered by notification, whether or not it is also eligible for registration by qualification under subsection (b) of this Code section, if:

(A) There has been no default during the current fiscal year nor within three preceding fiscal years in the payment of principal, interest, or dividends on any security of the issuer (or any predecessor) with a fixed maturity or a fixed interest or dividend provision; and

(B) The issuer and any predecessors during the past three fiscal years have had average net earnings, determined in accordance with generally accepted accounting principles, which are applicable to all securities without a fixed maturity or a fixed interest or dividend provision and which:

(i) Equal at least 5 percent of the amount of securities without a fixed maturity or a fixed interest or dividend provision outstanding at the date the registration statement is filed (as measured by the maximum offering price or the market price on a day selected by the registrant within 30 days before the date of filing the registration statement, whichever is higher or, if there is neither a readily determinable market price nor an offering price, as measured by book value on a day selected by the registrant and within 90 days of the date of filing the registration statement); or

(ii) If the issuer and any predecessors have not had any securities without a fixed maturity or a fixed interest or dividend provision outstanding for three full fiscal years, equal at least 5 percent of the amount (as measured by the maximum public offering price) of such securities which will be outstanding if all the securities being offered or proposed to be offered (whether or not they are proposed to be registered or offered in this state) are issued.

(2) A registration statement under this subsection shall be signed by the issuer, any other person on whose behalf the offering is to be made, any registered dealer, limited dealer, or by any duly authorized agent of any such person and shall contain the following information or documents, in addition to payment of the filing fee prescribed in subsection (a) of Code Section 10-5-6, and, if required under subsection (c) of Code Section 10-5-6, a consent to service of process meeting the requirements of Code Section 10-5-18:

(A) A statement demonstrating eligibility for registration by notification;

(B) The issuer's name, address, and form of organization; the state (or foreign jurisdiction) and the date of its organization; and the general character and location of its business;

(C) With respect to any person on whose behalf any part of the offering is to be made in a nonissuer distribution: his name and address and the amount of securities of the issuer held by him as of the date of the filing of the registration statement;

(D) The information specified in subparagraph (c)(1)(H) of this Code section; and

(E) Any prospectus proposed to be used in offering the securities in this state and a copy of any underwriting or selling agreement relating to the offering.

(3) If no stop order is in effect and no proceeding is pending under Code Section 10-5-16, a registration statement under this subsection automatically becomes effective at 3:00 P.M. eastern standard time or eastern daylight time, whichever is applicable, of the fifth full business day after the filing of the registration statement, or at such earlier time as the commissioner determines.

(e) Small issue registration.

(1) The sale of securities of an issuer by or on behalf of such issuer or an affiliate of such issuer may be made pursuant to a registration statement filed under this subsection if:

(A) The aggregate amount of the total offering, within or outside this state, shall not exceed $1 million, less the aggregate offering price for all securities sold within the 12 months before the start of and during the offering of securities under this subsection in reliance on the exemption in paragraph (13) of Code Section 10-5-9 or in violation of this Code section; provided, however, that the commissioners shall have authority to increase, by rule or regulation, the limitation on the aggregate offering amount in order to further the objectives of compatibility with federal exemptions and uniformity among states; or

(B) The aggregate number of persons in this state purchasing securities registered under this subsection from the issuer and all affiliates of the issuer during any 12 month period shall not exceed 50 persons, including persons who acquire such securities in transactions which are otherwise exempt from registration in paragraph (13) of Code Section 10-5-9; however, any certificate or certificates representing securities issued in a transaction subject to the numerical limitation on the number of investors pursuant to this paragraph shall be marked for a period of one year from the date of their issuance or sale to indicate clearly that they were registered pursuant to this subsection and that they may not be sold or transferred except in a transaction which is exempt under this chapter or pursuant to an effective registration statement under this chapter or in a transaction which is otherwise in compliance with this chapter and shall be executed with a statement to the effect that such securities have been purchased for investment, as such phrase is defined in paragraph (13) of Code Section 10-5-9, for his own account.

(2) A registration statement under this subsection shall be signed by the issuer, its chief executive officer, its principal financial officer, its comptroller or principal accounting officer, and a majority of the board of directors or persons performing similar functions (or, if there is no board of directors or persons performing similar functions, by the majority of the persons or board having the power of management of the issuer). If the issuer is not a corporation registered with the Secretary of State, the registration statement shall also include a copy of the issuer's articles of incorporation and bylaws or their substantial equivalents, as currently in effect, and a copy of any indenture or similar instrument relating to the security to be registered.

(3) A prospectus, a copy of which shall be contained in the registration statement, shall be delivered to any purchaser of securities registered pursuant to this subsection prior to or simultaneously with the execution by the purchaser of a written agreement to purchase, the delivery of a confirmation of sale, or the payment for securities offered by means of such prospectus, whichever occurs first. The prospectus under which securities registered pursuant to this subsection are sold shall contain the following:

(A) With respect to the issuer: its name, street address, form of organization, and its telephone number; the state or foreign jurisdiction and date of its organization; a brief description of the type and location of its business;

(B) The following financial statements which may, but need not, be certified:

(ii) A profit and loss statement of the issuer or consolidated statements of the issuer and its subsidiaries prepared in accordance with generally accepted accounting principles for each of the two fiscal years preceding the date of the balance sheet filed and for the interim period, if any, between the close of the most recent of such fiscal years and the date of the balance sheet filed and for the corresponding period of the preceding year or, if the issuer and its predecessors have been in existence for less than two fiscal years, the profit and loss statement for the periods for which it has been in existence; provided, however, if the issuer does not report its accounts in the normal course of its business on a consolidated basis, then it may furnish, in lieu of consolidated statements, individual statements for it and its majority owned subsidiaries;

(D) With respect to every officer and director of the issuer or person occupying a similar status or performing similar functions and with respect to every affiliate of the issuer, a description of: all securities of the issuer and its subsidiaries which are beneficially owned or expected to be beneficially owned, and the amount and type of consideration which was or will be given for such securities, and any material interest in any other material transactions with the issuer or any significant subsidiary of the issuer effected within the past three years or expected to be effected; and

(E) Any additional information which is needed to comply with Code Section 10-5-12 and which is not otherwise disclosed to the purchaser.

(4) The commissioner shall be authorized to accept a prospectus prepared by the issuer if the prospectus has been subjected to an examination which, in the discretion of the commissioner, is equal to or greater than the examination provided by the commissioner.

(5) Registration statements filed pursuant to this subsection will become effective if no stop order is in effect and no proceeding is pending under Code Section 10-5-16, at 3:00 P.M. eastern standard time or eastern daylight time, whichever is applicable, of the tenth full business day after the filing of the registration statement or at such earlier time as the commissioner orders.

(6) Preliminary negotiations and agreements in contemplation of a registration and sale of a security pursuant to this subsection shall not constitute an "offer to sell," "offer for sale," "offer," or "sale" of a security for the purposes of this Code section unless, before a registration statement relating thereto is effective, the seller receives some consideration for such security, a contract for sale of such security is executed, or the security is sold. Purchasers of securities registered pursuant to this subsection shall have the right to rescind such purchases on the terms and conditions set forth in paragraph (4) of subsection (b) of this Code section.

(7) In case any of the financial statements contained in the registration statement filed under this subsection are certified, they shall be certified by an independent public accountant duly registered and in good standing as such under the laws of the place of his residence or principal office.

(8) If any accountant, attorney, engineer, or appraiser or any person whose profession gives authority to a statement made by him is named in the registration statement as having prepared an opinion referred to in the registration statement or as having certified any part of the registration statement or is named as having prepared or certified a report of valuation for use in connection with the registration statement, the written consent of such person to the references to him in the registration statement shall be filed with the commissioner prior to the effectiveness of the registration statement.

(9) The commissioner shall be authorized to participate in any program designed to promote and achieve compatibility with federal law and uniformity among the states and to promulgate such rules and regulations as may be necessary to achieve such compatibility and uniformity.

(10) The commissioner shall treat as confidential and not subject to public inspection all material filed by or on behalf of the issuer pursuant to this subsection unless he shall determine that such treatment is not consistent with the public interest, in which case he may make public such of the filed information as he may deem necessary for protection of the public interest.

(11) The commissioner may modify any legend required by this subsection to conform to standardized legends, but any modification shall ensure that the legend contains substantially the same information required by this chapter.

(f) Nonprofit issuer registration.

(1) Sales of securities issued by any person organized and operated:

(A) Not for private profit; and

(B) No part of the net earnings of which inures to the benefit of any person, private stockholder, or individual

made by or on behalf of such issuer may be made pursuant to a registration statement filed pursuant to this subsection.

(A) A copy of the prospectus proposed to be used in complying with the requirements of paragraph (4) of this subsection;

(B) A copy of any notice, circular, advertisement, sales literature, letter, or communication (if any such notice, circular, advertisement, sales literature, letter, or communication is to be used in connection with the offering) in respect of a security which states from whom a written prospectus meeting the requirements of paragraph (4) of this subsection may be obtained and which does no more than identify the security, state the price thereof, state by whom orders will be executed, and contain such other information as the commissioner, by rules or regulations, deemed necessary or appropriate in the public interest and for the protection of investors and subject to such terms and conditions as may be prescribed therein, may permit;

(C) A specimen or copy of the securities being registered and a copy of the issuer's articles of incorporation and bylaws or their substantial equivalents, as currently in effect;

(D) If the securities described in the prospectus forming a part of the registration statement are to be secured by any interest in or lien upon any real or personal property, a signed opinion of legal counsel which states that such interest or lien will be as described in such prospectus and that such interest or lien has been filed of record and otherwise perfected under applicable law;

(E) A copy of any underwriting or selling group agreement pursuant to which the distribution is to be made;

(F) A copy of every management or other material contract referred to in the prospectus;

(G) A signed copy of any professional opinion or any reports or certifications specifically referred to in the prospectus;

(H) A copy of any literature concerning the issuer or the offering given to any person directly engaged in the sale of securities;

(I) A written consent of each director of the issuer or any person occupying a similar status or performing a similar function to the use of his name in the prospectus unless such director or person has signed the registration statement;

(J) If any accountant, attorney, engineer, or appraiser or any person whose profession gives authority to a statement made by him is named in the registration statement as having prepared an opinion referred to in the registration statement or as having certified any part of the registration statement or is named as having prepared or certified a report of valuation for use in connection with the registration statement, the written consent of such person to the references to him in the registration statement; and

(K) A copy of any trust indenture required by paragraph (3) of this subsection.

(3)(A) If the securities to be registered are bonds, notes, debentures, evidences of indebtedness, or any interest in such securities, the provisions for disbursing the proceeds of such securities, for collecting and disbursing funds for the payment of principal of and interest on such securities, and for governing the rights of the trustee and the holders of such securities with respect to any collateral or other security therefor shall be governed by an indenture between the issuer of such securities and a trustee or trustees.

(B) Each such trustee shall be an attorney duly admitted to practice before the highest court of any state who is not regularly employed by the issuer or underwriter of the securities subject to the indenture or a corporation which is organized and doing business under the laws of the United States or any state, which is qualified to do business in Georgia, which is authorized to exercise corporate trust powers, and which is subject to supervision or examination by an agency or authority of the United States or the state of its incorporation or principal place of business:

(i) Provided that no such attorney or corporation may serve as trustee if such attorney or corporation:

(I) Serves as trustee under an indenture covering any other securities of the issuer of the securities subject to the indenture;

(II) Is an affiliate of the issuer or underwriter of the securities subject to the indenture;

(III) Is a guarantor of or an affiliate of an obligor upon or a guarantor of the securities subject to the indenture;

(IV) Is the beneficial owner of, or holds as collateral security for an obligation which is in default, 5 percent or more of the voting securities of, or 10 percent or more of any other class of security of the issuer of the securities subject to the indenture; or

(V) Is the beneficial owner of, or holds as collateral security for an obligation which is in default, 10 percent or more of any class of security of any person who, to the knowledge of such attorney or corporation, owns 50 percent or more of the voting securities of the issuer or any guarantor of the securities subject to the indenture; and

(ii) Provided, further, that no such attorney nor any director or executive officer (or persons performing similar functions) of such corporation:

(I) Is a director, officer, partner, employee, appointee, or representative of the issuer, any guarantor, or any underwriter of the securities subject to the indenture; or

(II) Is a guarantor or underwriter of or an obligor upon the securities subject to the indenture.

(i) A provision requiring the trustee to maintain a current list of the names and addresses of the holders of the securities subject to the indenture; and

(ii) A provision that the trustee, in case of any failure to make, when due, any payment into any sinking fund for the repayment of the securities subject to the indenture or any payment of the principal of or interest on the securities subject to the indenture, which failure is not corrected within 30 days of the date such payment was due, shall have the authority to commence a civil action to recover on behalf of the holders of the securities subject to the indenture all payments of principal and interest which are due and have not been paid; to declare the entire outstanding principal balance of and accrued but unpaid interest on such securities to be immediately due and payable and to commence a civil action to recover such principal and interest on behalf of the holders of the securities subject to the indenture; to take possession of and dispose of any collateral security subject to the indenture; and to secure such additional relief as the parties to the indenture shall provide; and a provision that, upon occurrence of any such failure, the trustee shall notify, to the extent that it can identify them, the holders of such securities of the occurrence of such failure and of its intentions with respect thereto.

(4) The prospectus required in this paragraph shall be delivered to any purchaser of securities registered pursuant to this subsection prior to or simultaneously with the execution by the purchaser of a written agreement to purchase, the delivery of a confirmation of sale, or the payment for securities offered by means of such prospectus, whichever occurs first. The prospectus under which securities registered pursuant to this subsection are sold shall contain the following:

(A) With respect to the issuer: its name, street address, form of organization, and telephone number; the state or foreign jurisdiction and date of its organization; and a brief description of the type of business or other endeavors it conducts;

(B) The following financial statements:

(i) A balance sheet of the issuer or a consolidated balance sheet of the issuer and its subsidiaries prepared in accordance with generally accepted accounting principles as of the date within 90 days prior to the filing of the registration statement; and

(ii) A statement of source and application of funds of the issuer or consolidated statements of the issuer and its subsidiaries prepared in accordance with generally accepted accounting principles for each of the two fiscal years preceding the date of the balance sheet filed and for the interim period, if any, between the close of the most recent of such fiscal years and the date of the balance sheet filed and for the corresponding period of the preceding year or, if the issuer and its predecessors have been in existence for less than two fiscal years, the statement of source and application of funds for the periods for which it has been in existence; provided, however, if the issuer does not report its accounts in the normal course of its business on a consolidated basis, then it may furnish, in lieu of consolidated statements, individual statements for it and its majority owned subsidiaries;

(D) A summary of special risk factors, if any, involved in the purchase of such securities;

(E) With respect to any underwriter of the securities being registered: a description of all fees, commissions, expenses, and other payments and remunerations received or to be received directly or indirectly by such underwriter and its affiliates in connection with the sale of the securities being registered and a description of any affiliation, interest, or arrangement such underwriter may have with any building contractor, supplier, paying agent, or other person who may receive any proceeds from the sale of the securities being registered;

(F) A description of the material terms of the securities to be registered and, if such securities are bonds, notes, debentures, evidences of indebtedness, or any interest in such securities, a description of the material terms of the indenture under which the securities are to be issued; and

(G) Any additional information needed to comply with paragraph (2) of subsection (a) of Code Section 10-5-12.

(5) In case any of the financial statements contained in the registration statement filed under this subsection are certified, they shall be certified by an independent public accountant duly registered and in good standing as such under the laws of the place of his residence or principal office.

(6) Registration statements filed pursuant to this subsection will become effective if no stop order is in effect and no proceeding is pending under Code Section 10-5-16 at 3:00 P.M. eastern standard time or eastern daylight time, whichever is applicable, on the fifth full business day after the filing of the registration statement or at such earlier time as the commissioner orders.

(g) Notice filings by issuers of federal covered securities.

(1) Any security that is a federal covered security under Section 18(b)(2) of the Securities Act of 1933 may be offered for sale and sold into, from, or within this state only upon the commissioner's receipt of a copy of the registration statement and all other documents filed by the issuer with the Securities and Exchange Commission or, in lieu of filing such registration statement and other documents, a notice as prescribed by the commissioner by rule or regulation; a consent to service of process; and payment of a fee of $250.00 for each fund or unit investment trust. Such notice filing shall meet the following conditions:

(A) Unless otherwise extended by the commissioner, an initial notice filing under this paragraph shall be effective for a period of 14 months commencing upon the later of the date the notice or registration statement, as applicable, is received by the commissioner or the date the offering is effective with the Securities and Exchange Commission. A notice filing may be renewed by filing, prior to its expiration, a renewal notice as prescribed by the commissioner together with a renewal fee of $100.00 for each fund or unit investment trust renewed. A renewal notice filing shall be effective upon expiration of the previous notice filing.

(B) A notice filing may be amended as provided by the commissioner by rule or regulation.

(2) The commissioner, by rule or regulation, may require the filing of any document filed with the Securities and Exchange Commission under the Securities Act of 1933 for any security that is a federal covered security under Section 18(b)(3) or (4) of the Securities Act of 1933, together with any fees required under this chapter and a consent to service of process.

(3) The commissioner may issue a stop order suspending the offer or sale of a federal covered security in this state if the commissioner reasonably believes there has been a violation of the provisions of this Code section.

(4) The commissioner, by rule or regulation, may, if he or she deems it to be in the best interests of the public, waive any or all of the provisions of this Code section.

COX v. EDELSON et al.; and vice versa. (243 Ga. App. 5) (530 SE2d 250) (2000)

BELL et al. v. SASSER et al.; and vice versa. (238 Ga. App. 843) (520 SE2d 287) (1999)

CARTER v. MOODY; and vice versa. (236 Ga. App. 262) (511 SE2d 520) (1999)

TREND STAR CONTINENTAL, LTD. et al. v. BRANHAM et al. (220 Ga. App. 781) (469 SE2d 750) (1996)

GREENHILL v. THE STATE. (199 Ga. App. 218) (404 SE2d 577) (1991)

HALL v. THE STATE.; THAYER v. THE STATE. (189 Ga. App. 321) (376 SE2d 199) (1988)

Defined terms referenced in this section: