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8000 - Miscellaneous Statutes and Regulations


APPLICATION OF SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS.

SEC. 27A. (a)  APPLICABILITY.--This section shall apply only to a forward-looking statement made by--

(1)  an issuer that, at the time that the statement is made, is subject to the reporting requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934;

(2)  a person acting on behalf of such issuer;

(3)  an outside reviewer retained by such issuer making a statement on behalf of such issuer; or

(4)  an underwriter, with respect to information provided by such issuer or information derived from information provided by the issuer.

(b)  EXCLUSIONS.--Except to the extent otherwise specifically provided by rule, regulation, or order of the Commission, this section shall not apply to a forward-looking statement--

(1)  that is made with respect to the business or operations of the issuer, if the issuer--

(A)  during the 3-year period preceding the date on which the statement was first made--

(i)  was convicted of any felony or misdemeanor described in clauses (i) through (iv) of section 15(b)(4)(B) of the Securities Exchange Act of 1934; or

(ii)  has been made the subject of a judicial or administrative decree or order arising out of a governmental action that--

(I)  prohibits future violations of the antifraud provisions of the securities laws;

(II)  requires that the issuer cease and desist from violating the antifraud provisions of the securities laws; or

(III)  determines that the issuer violated the antifraud provisions of the securities laws;

(B)  makes the forward-looking statement in connection with an offering of securities by a blank check company;

(C)  issues penny stock;

(D)  makes the forward-looking statement in connection with a rollup transaction; or

(E)  makes the forward-looking statement in connection with a going private transaction; or

(2)  that is--

(A)  included in a financial statement prepared in accordance with generally accepted accounting principles;

(B)  contained in a registration statement of, or otherwise issued by, an investment company;

(C)  made in connection with a tender offer;

(D)  made in connection with an initial public offering;

(E)  made in connection with an offering by, or relating to the operations of, a partnership, limited liability company, or a direct participation investment program; or

(F)  made in a disclosure of beneficial ownership in a report required to be filed with the Commission pursuant to section 13(d) of the Securities Exchange Act of 1934.

(c)  SAFE HARBOR.--

(1)  IN GENERAL.--Except as provided in subsection (b), in any private action arising under this title that is based on an untrue statement of a material fact or omission of a material fact necessary to make the statement not misleading, a person referred to in subsection (a) shall not be liable with respect to any forward-looking statement, whether written or oral, if and to the extent that--

(A)  the forward-looking statement is--

(i)  identified as a forward-looking statement, and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement; or

(ii)  immaterial; or

(B)  the plaintiff fails to prove that the forward-looking statement--

(i)  if made by a natural person, was made with actual knowledge by that person that the statement was false or misleading; or

(ii)  if made by a business entity; was--

(I)  made by or with the approval of an executive officer of that entity, and

(II)  made or approved by such officer with actual knowledge by that officer that the statement was false or misleading.

(2)  ORAL FORWARD-LOOKING STATEMENTS.--In the case of an oral forward-looking statement made by an issuer that is subject to the reporting requirements of section 13(a) or section 15(d) of the Securities Exchange Act of 1934, or by a person acting on behalf of such issuer, the requirement set forth in paragraph (1)(A) shall be deemed to be satisfied--

A)  if the oral forward-looking statement is accompanied by a cautionary statement--

(i)  that the particular oral statement is a forward-looking statement; and

(ii)  that the actual results could differ materially from those projected in the forward-looking statement; and

(B)  if--

(i)  the oral forward-looking statement is accompanied by an oral statement that additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statement is contained in a readily available written document, or portion thereof;

(ii)  the accompanying oral statement referred to in clause (i) identifies the document, or portion thereof, that contains the additional information about those factors relating to the forward-looking statement; and

(iii)  the information contained in that written document is a cautionary statement that satisfies the standard established in paragraph (1)(A).

(3)  AVAILABILITY.--Any document filed with the Commission or generally disseminated shall be deemed to be readily available for purposes of paragraph (2).

(4)  EFFECT ON OTHER SAFE HARBORS.--The exemption provided for in paragraph (1) shall be in addition to any exemption that the Commission may establish by rule or regulation under subsection (g).

(d)  DUTY TO UPDATE.--Nothing in this section shall impose upon any person a duty to update a forward-looking statement.

(e)  DISPOSITIVE MOTION.--On any motion to dismiss based upon subsection (c)(1), the court shall consider any statement cited in the complaint and cautionary statement accompanying the forward-looking statement, which are not subject to material dispute, cited by the defendant.

(f)  STAY PENDING DECISION ON MOTION.--In any private action arising under this title, the court shall stay discovery (other than discovery that is specifically directed to the applicability of the exemption provided for in this section) during the pendency of any motion by a defendant for summary judgment that is based on the grounds that--

(1)  the statement or omission upon which the complaint is based is a forward-looking statement within the meaning of this section; and

(2)  the exemption provided for in this section precludes a claim for relief.

(g)  EXEMPTION AUTHORITY.--In addition to the exemptions provided for in this section, the Commission may, by rule or regulation, provide exemptions from or under any provision of this title, including with respect to liability that is based on a statement or that is based on projections or other forward-looking information, if and to the extent that any such exemption is consistent with the public interest and the protection of investors, as determined by the Commission.

(h)  EFFECT ON OTHER AUTHORITY OF COMMISSION.--Nothing in this section limits, either expressly or by implication, the authority of the Commission to exercise similar authority or to adopt similar rules and regulations with respect to forward-looking statements under any other statute under which the Commission exercises rulemaking authority.

(i)  DEFINITIONS.--For purposes of this section, the following definitions shall apply:

(1)  FORWARD-LOOKING STATEMENT.--The term "forward-looking statement" means--

(A)  a statement containing a projection of revenues, income (including income loss), earnings (including earnings loss) per share, capital expenditures, dividends, capital structure, or other financial items;

(B)  a statement of the plans and objectives of management for future operations, including plans or objectives relating to the products or services of the issuer;

(C)  a statement of future economic performance, including any such statement contained in a discussion and analysis of financial condition by the management or in the results of operations included pursuant to the rules and regulations of the Commission;

(D)  any statement of the assumptions underlying or relating to any statement described in subparagraph (A), (B), or (C);

(E)  any report issued by an outside reviewer retained by an issuer, to the extent that the report assesses a forward-looking statement made by the issuer; or

(F)  a statement containing a projection or estimate of such other items as may be specified by rule or regulation of the Commission.

(2)  INVESTMENT COMPANY.--The term "investment company" has the same meaning as in section 3(a) of the Investment Company Act of 1940.

(3)  PENNY STOCK.--The term "penny stock" has the same meaning as in section 3(a)(51) of the Securities Exchange Act of 1934, and the rules and regulations, or orders issued pursuant to that section.

(4)  GOING PRIVATE TRANSACTION.--The term "going private transaction" has the meaning given that term under the rules or regulations of the Commission issued pursuant to section 13(e) of the Securities Exchange Act of 1934.

(5)  SECURITIES LAWS.--The term "securities laws" has the same meaning as in section 3 of the Securities Exchange Act of 1934.

(6)  PERSON ACTING ON BEHALF OF AN ISSUER.--The term "person acting on behalf of an issuer" means an officer, director, or employee of the issuer.

(7)  OTHER TERMS.--The terms "blank check company", "rollup transaction", "partnership", "limited liability company", "executive officer of an entity" and "direct Miscellaneous Statutes and Regulations>participation investment program", have the meanings given those terms by rule or regulation of the Commission.

[Codified to 15 U.S.C. 77z--2]

[Source:  Section 102(a) of title I of the Act of December 22, 1995 (Pub. L. No. 104--67; 109 Stat. 749), effective December 22, 1995; as amended by section 301(a)(5) of title III of the Act of November 3, 1998 (Pub. L. No. 105--353; 112 Stat. 3235), effective November 3, 1998]

SEC. 28. GENERAL EXEMPTIVE AUTHORITY.--The Commission, by rule or regulation, may conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of this title or of any rule or regulation issued under this title, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.

[Codified to 15 U.S.C. 77z--3]

[Source:  Section 105(a) of title I of the Act of October 11, 1996 (Pub. L. No. 104--290; 110 Stat. 3424), effective October 11, 1996; as amended by section 301(a)(5) of title III of the Act of November 3, 1998 (Pub. L. No. 105--353; 112 Stat. 3235), effective November 3, 1998]

SCHEDULE A

(1)  The name under which the issuer is doing or intends to do business;

(2)  the name of the State or other sovereign power under which the issuer is organized;

(3)  the location of the issuer's principal business office, and if the issuer is a foreign or territorial person, the name and address of its agent in the United States authorized to receive notice;

(4)  the names and addresses of the directors or persons performing similar functions, and the chief executive, financial and accounting officers, chosen or to be chosen if the issuer be a corporation, association, trust, or other entity; of all partners, if the issuer be a partnership; and of the issuer, if the issuer be an individual; and of the promoters in the case of a business to be formed, or formed within two years prior to the filing of the registration statement;

(5)  the names and addresses of the underwriters;

(6)  the names and addresses of all persons, if any, owning of record or beneficially, if known, more than 10 per centum of any class of stock of the issuer, or more than 10 per centum in the aggregate of the outstanding stock of the issuer as of a date within twenty days prior to the filing of the registration statement;

(7)  the amount of securities of the issuer held by any person specified in paragraphs (4), (5), and (6) of this schedule, as of a date within twenty days prior to the filing of the registration statement, and, if possible, as of one year prior thereto, and the amount of the securities, for which the registration statement is filed, to which such persons have indicated their intention to subscribe;

(8)  the general character of the business actually transacted or to be transacted by the issuer;

(9)  a statement of the capitalization of the issuer, including the authorized and outstanding amounts of its capital stock and the proportion thereof paid up, the number and classes of shares in which such capital stock is divided, par value thereof, or if it has no par value, the stated or assigned value thereof, a description of the respective voting rights, preferences, conversion and exchange rights, rights to dividends, profits, or capital of each class, with respect to each other class, including the retirement and liquidation rights or values thereof; Miscellaneous Statutes and Regulations>

(10)  a statement of the securities, if any, covered by options outstanding or to be created in connection with the security to be offered, together with the names and addresses of all persons, if any, to be allotted more than 10 per centum in the aggregate of such options;

(11)  the amount of capital stock of each class issued or included in the shares of stock to be offered;

(12)  the amount of the funded debt outstanding and to be created by the security to be offered, with a brief description of the date, maturity, and character of such debt, rate of interest, character of amortization provisions, and the security, if any, therefor. If substitution of any security is permissible, a summarized statement of the conditions un- der which such substitution is permitted. If substitution is permissible without notice, a specific statement to that effect;

(13)  the specific purposes in detail and the approximate amounts to be devoted to such purposes, so far as determinable, for which the security to be offered is to supply funds, and if the funds are to be raised in part from other sources, the amounts thereof and the sources thereof, shall be stated;

(14)  the renumeration, paid or estimated to be paid, by the issuer or its predecessor directly or indirectly, during the past year and ensuing year to (a) the directors or persons performing similar functions, and (b) its officers and other persons, naming them wherever such remuneration exceeded $25,000 during any such year;

(15)  the estimated net proceeds to be derived from the security to be offered;

(16)  the price at which it is proposed that the security shall be offered to the public or the method by which such price is computed and any variation therefrom at which any portion of such security is proposed to be offered to any persons or classes of persons, other than the underwriters, naming them or specifying the class. A variation in price may be proposed prior to the date of the public offering of the security, but the Commission shall immediately be notified of such variation;

(17)  all commissions or discounts paid or to be paid, directly or indirectly, by the issuer to the underwriters in respect of the sale of the security to be offered. Commissions shall include all cash, securities, contracts, or anything else of value, paid, to be set aside, disposed of, or understandings with or for the benefit of any other persons in which any underwriter is interested, made, in connection with the sale of such security. A commission paid or to be paid in connection with the sale of such security by a person in which the issuer has an interest or which is controlled or directed by, or under common control with, the issuer shall be deemed to have been paid by the issuer. Where any such commission is paid the amount of such commission paid to each underwriter shall be stated;

(18)  the amount or estimated amounts, itemized in reasonable detail, of expenses, other than commissions specified in paragraph (17) of this schedule, incurred or borne by or for the account of the issuer in connection with the sale of the security to be offered or properly chargeable thereto, including legal, engineering, certification, authentication, and other charges;

(19)  the net proceeds derived from any security sold by the issuer during the two years preceding the filing of the registration statement, the price at which such security was offered to the public, and the names of the principal underwriters of such security;

(20)  any amount paid within two years preceding the filing of the registration statement or intended to be paid to any promoter and the consideration for any such payment;

(21)  the names and addresses of the vendors and the purchase price of any property, or good will, acquired or to be acquired, not in the ordinary course of business, which is to be defrayed in whole or in part from the proceeds of the security to be offered, the amount of any commission payable to any person in connection with such acquisition, and the name or names of such person or persons, together with any expense incurred or to be incurred in connection with such acquisition, including the cost of borrowing money to finance such acquisition;

(22)  full particulars of the nature and extent of the interest, if any, of every director, principal executive officer, and of every stockholder holding more than 10 per centum of any class of stock or more than 10 per centum in the aggregate of the stock of the issuer, in any property acquired, not in the ordinary course of business of the issuer, within two years preceding the filing of the registration statement or proposed to be acquired at such date;

(23)  the names and addresses of counsel who have passed on the legality of the issue;

(24)  dates of and parties to, and the general effect concisely stated of every material contract made, not in the ordinary course of business, which contract is to be executed in whole or in part at or after the filing of the registration statement or which contract has been made not more than two years before such filing. Any management contract or contract providing for special bonuses or profit-sharing arrangements, and every material patent or contract for a material patent right, and every contract by or with a public utility company or an affiliate thereof, providing for the giving or receiving of technical or financial advice or service (if such contract may involve a charge to any party thereto at a rate in excess of $2,500 per year in cash or securities or anything else of value), shall be deemed a material contract;

(25)  a balance sheet as of a date not more than ninety days prior to the date of the filing of the registration statement showing all of the assets of the issuer, the nature and cost thereof, whenever determinable, in such detail and in such form as the Commission shall prescribe (with intangible items segregated), including any loan in excess of $20,000 to any officer, director, stockholder or person directly or indirectly controlling or controlled by the issuer, or person under direct or indirect common control with the issuer. All the liabilities of the issuer in such detail and such form as the Commission shall prescribe, including surplus of the issuer showing how and from what sources such surplus was created, all as of a date not more than ninety days prior to the filing of the registration statement. If such statement be not certified by an independent public or certified accountant, in addition to the balance sheet required to be submitted under this schedule, a similar detailed balance sheet of the assets and liabilities of the issuer, certified by an independent public or certified accountant, of a date not more than one year prior to the filing of the registration statement, shall be submitted;

(26)  a profit and loss statement of the issuer showing earnings and income, the nature and source thereof, and the expenses and fixed charges in such detail and such form as the Commission shall prescribe for the latest fiscal year for which such statement is available and for the two preceding fiscal years, year by year, or if such issuer has been in actual business for less than three years, then for such time as the issuer has been in actual business, year by year. If the date of the filing of the registration statement is more than six months after the close of the last fiscal year, a statement from such closing date to the latest practicable date. Such statement shall show what the practice of the issuer has been during the three years or lesser period as to the character of the charges, dividends or other distributions made against its various surplus accounts, and as to depreciation, depletion, and maintenance charges, in such detail and form as the Commission shall prescribe, and if stock dividends or avails from the sale of rights have been credited to income they shall be shown separately with a statement of the basis upon which the credit is computed. Such statement shall also differentiate between any recurring and nonrecurring income and between any investment and operating income. Such statement shall be certified by an independent public or certified accountant;

(27)  if the proceeds, or any part of the proceeds, of the security to be issued is to be applied directly or indirectly to the purchase of any business, a profit and loss statement of such business certified by an independent public or certified accountant, meeting the requirements of paragraph (26) of this schedule, for the three preceding fiscal years, together with a balance sheet, similarly certified, of such business, meeting the requirements of paragraph (25) of this schedule of a date not more than ninety days prior to the filing of the registration statement or at the date such business was acquired by the issuer if the business was aquired by the issuer more than ninety days prior to the filing of the registration statement;

(28)  a copy of any agreement or agreements (or, if identical agreements are used, the forms thereof) made with any underwriter, including all contracts and agreements referred to in paragraph (17) of this schedule;

(29)  a copy of the opinion or opinions of counsel in respect to the legality of the issue, with a translation of such opinion, when necessary, into the English language;

(30)  a copy of all material contracts referred to in paragraph (24) of this schedule, but no disclosure shall be required of any portion of any such contract if the Commission determines that disclosure of such portion would impair the value of the contract and would not be necessary for the protection of the investors;

(31)  unless previously filed and registered under the provisions of this title, and brought up to date, (a) a copy of its articles of incorporation, with all amendments thereof and of its existing bylaws or instruments corresponding thereto, whatever the name, if the issuer be a corporation; (b) a copy of all instruments by which the trust is created or declared, if the issuer is a trust; (c) a copy of its articles of partnership or association and all other papers pertaining to its organization, if the issuer is a partnership, unincorporated association, joint-stock company, or any other form of organization; and

(32)  a copy of the underlying agreements or indentures affecting any stock, bonds, or debentures offered or to be offered.

In case of certificates of deposit, voting trust certificates, collateral trust certificates, certificates of interest or shares in unincorporated investments trust, equipment trust certificates, interim or other receipts for certificates, and like securities, the Commission shall establish rules and regulations requiring the submission of information of a like character applicable to such cases, together with such other information as it may deem appropriate and necessary regarding the character, financial or otherwise, of the actual issuer of the securities and/or the person performing the acts and assuming the duties of depositor or manager.

SCHEDULE B

(1)  Name of borrowing government or subdivision thereof;

(2)  specific purposes in detail and the approximate amounts to be devoted to such purposes, so far as determinable, for which the security to be offered is to supply funds, and if the funds are to be raised in part from other sources, the amounts thereof and the sources thereof, shall be stated;

(3)  the amount of the funded debt and the estimated amount of the floating debt outstanding and to be created by the security to be offered, excluding intergovernmental debt, and a brief description of the date, maturity, character of such debt, rate of interest, character of amortization provisions, and the security, if any, therefor. If substitution of any security is permissible, a statement of the conditions under which such substitution is permitted. If substitution is permissible without notice, a specific statement to that effect;

(4)  whether or not the issuer or its predecessor has, within a period of twenty years prior to the filing of the registration statement, defaulted on the principal or interest of any external security, excluding intergovernmental debt, and, if so, the date, amount, and circumstances of such default, and the terms of the succeeding arrangement, if any;

(5)  the receipts, classified by source, and the expenditures, classified by purpose, in such detail and form as the Commission shall prescribe for the latest fiscal year for which such information is available and the two preceding fiscal years, year by year;

(6)  the names and addresses of the underwriters;

(7)  the name and address of its authorized agent, if any, in the United States;

(8)  The estimated net proceeds to be derived from the sale in the United States of the security to be offered;

(9)  the price at which it is proposed that the security shall be offered in the United States to the public or the method by which such price is computed. A variation in price may be proposed prior to the date of the public offering of the security, but the Commission shall immediately be notified of such variation;

(10)  all commissions paid or to be paid, directly or indirectly, by issuer to the underwriters in respect of the sale of the security to be offered. Commissions shall include all cash, securities, contracts, or anything else of value, paid, to be set aside, disposed of, or understandings with or for the benefit of any other person in which the underwriter is interested, made, in connection with the sale of such security. Where any such commission is paid, the amount of such commission paid to each underwriter shall be stated;

(11)  the amount or estimated amounts, itemized in reasonable detail, of expenses, other than the commissions specified in paragraph (10) of this schedule, incurred or borne by or for the account of the issuer in connection with the sale of the security to be offered or properly chargeable thereto, including legal, engineering, certification, and other charges;

(12)  the names and addresses of counsel who have passed upon the legality of the issue;

(13)  a copy of any agreement or agreements made with any underwriter governing the sale of the security within the United States; and

(14)  an agreement of the issuer to furnish a copy of the opinion or opinions of counsel in respect to the legality of the issue, with a translation, where necessary, into the English language. Such opinion shall set out in full all laws, decrees, ordinances, or other acts of Government under which the issue of such security has been authorized.

[Codified to 15 U.S.C. 77aa]

[Source:  Schedules A and B of title I of the Act of May 27, 1933 (Pub. L. No. 22; 48 Stat. 88, 91), effective May 27, 1933]


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