Current through Rules and Regulations filed through March 20, 2024
(1) Any person
seeking the Commissioner's approval, pursuant to O.C.G.A. §
10-5-11(9), of the fairness of the terms and conditions of the issuance and delivery of
securities in exchange for outstanding securities, claims, or property
interests, shall make application with the Commissioner as described in
paragraph (2) below. The Commissioner may in his sole discretion reject any
application. The Commissioner will only consider an application for a proposed
exchange transaction where fifty one percent (51%) or more of the persons to
whom it is proposed to issue securities or to deliver other consideration in an
exchange under O.C.G.A. §
10-5-11(9)
are persons who are Georgia residents, and:
(a) The applicant is a domestic business
entity formed, organized or incorporated under the laws of Georgia;
or
(b) The applicant is a business
entity whose headquarters or principal place of business is located in
Georgia.
(2) The
application and all accompanying documents shall be type-written and submitted
to the Commissioner in triplicate. The application shall be signed and dated by
the applicant or by a person authorized to act in the applicant's behalf. The
application shall request that the Commissioner conduct a hearing pursuant to
O.C.G.A. §
10-5-11(9) and shall contain the following information:
(a) The full legal name, state of
incorporation, and principal office address of any person proposing to issue
securities or deliver other consideration in the proposed exchange.
(b) A description of the proposed
transaction, including but not limited to all parties to the transaction, all
major lines of business engaged in by such parties, expected benefits of the
transaction, a chronological description of the transaction to date, a
projected timetable and description of all events necessary to consummate the
transaction, all legal and financial advisors providing advice to any party to
the transaction, and identification of any persons providing any valuation or
fairness opinions to any party with respect to the securities or other
consideration to be issued or exchanged in the proposed transaction.
(c) A description of the securities or other
consideration to be issued or delivered in the proposed exchange.
(d) A description of the bona fide
securities, claims or property interests for which the securities or other
consideration referred to in paragraph (2)(c) are to be exchanged, including
the full legal name, state of incorporation, and principal office address of
the issuer of any such bona fide securities.
(e) A brief statement of the terms and
conditions under which the securities or other consideration referred to in
paragraph (2)(c) will be issued and exchanged or delivered and exchanged for
the bona fide securities, claims or property interests.
(f) A list of the full legal names,
addresses, and percentage interest owned of all persons to whom the securities
will be issued or other consideration delivered in the exchange. If some or all
of such persons are to receive the securities or other consideration by virtue
of their ownership of shares of stock in a corporation, the applicant may
comply with this requirement by submitting a list which shows the shareholders
of the corporation and the number of shares and percentage of total shares held
by each shareholder as of a date not more than 30 days prior to the filing of
the application.
(g) A statement
setting forth the distinct number of and percentage total of all persons named
on the list to be provided pursuant to paragraph (2)(f) who are residents of
Georgia.
(h) A statement setting
forth proposed findings of fact which the applicant requests that the
Commissioner find and incorporate in the Commissioner's written decision with
respect to the application.
(i) A
statement as to whether the applicant intends to rely on the exemption from
federal securities registration provided for in Section 3(a)(10) of the
Securities Act of 1933,
15 U.S.C. §
77 c(a)(10).
(j) Any additional information which the
applicant desires the Commissioner to consider. The Commissioner may require
the applicant to submit other information in addition to the information
required by this Rule. The Commissioner may also waive or modify the
requirements of this Rule by allowing the applicant to submit less information
than this Rule would otherwise require.
(3) The application shall be accompanied by
the following documents:
(a) All written
agreements, and accompanying appendices, exhibits and/or attachments, governing
the proposed transaction.
(b) All
press releases or other media announcements regarding the proposed transaction
disseminated by any party to the proposed transaction.
(c) A draft copy of the notice of the
requested hearing to be held by the Commissioner in connection with the
application that the applicant plans to mail to all persons to whom the
applicant proposes to issue securities or to deliver other consideration in the
proposed transaction.
(d) An
audited balance sheet, prepared in accordance with generally accepted
accounting principles applicable in the United States ("US GAAP"), as of the
close of the most recent fiscal year of any person whose securities will be
issued or exchanged in the proposed transaction.
(e) An audited income statement, prepared in
accordance with US GAAP, for the most recent fiscal year of any person whose
securities will be issued or exchanged in the proposed transaction.
(f) All valuation or fairness opinions
identified in paragraph (2)(c), including all materials supporting any parties'
valuation of the securities or other consideration to be issued or exchanged in
the proposed transaction.
(g) Any
other documents which the applicant desires the Commissioner to consider. The
Commissioner may require the applicant to submit other documents in addition to
the documents required by this Rule. The Commissioner may also waive or modify
the requirements of this Rule by allowing the applicant to submit fewer
documents other than those which this Rule would otherwise require.
(h) A non-refundable filing fee of five
hundred dollars ($500.00).
(i) A
written undertaking to pay, upon receipt of an invoice from the Commissioner,
the fees and costs required by paragraph (4)(d) of this Rule.
(j) A completed and notarized Form U-2,
Uniform Consent to Service of Process.
(4) The procedure following application shall
be as follows:
(a) The Commissioner may inform
the applicant of any deficiencies in the application or of any additional
information or documents required and may require the applicant to amend or
resubmit the application prior to setting a date for the hearing.
(b) The Commissioner, in his sole discretion,
may retain an independent valuation consultant to review all of the materials
submitted in paragraph (2)(f) of this Rule.
(c) Upon the filing of an application
complying with the provisions of this Rule, correction of any deficiencies
and/or amendment of the application as necessary, and receipt of all materials
requested by the Commissioner, the Commissioner will, within a reasonable
period of time, inform the applicant of the date, hour and place of the
hearing.
(d) Upon the
Commissioner's issuance of a Notice of Hearing pursuant to Rule
590-4-6-.07, the applicant shall
remit to the Commissioner a non-refundable fairness proceeding fee of seven
thousand five hundred dollars ($7,500.00) and shall reimburse the Commissioner
for all costs incurred by the Commissioner in connection with the fairness
proceeding, including any costs in connection with the retention of any
independent valuation consultant.
(e) The applicant shall mail by United States
Mail, Postage Prepaid, notice of such hearing to all persons to whom it is
proposed to issue securities or to deliver such other consideration in such
exchange, not less than 14 days prior to such hearing. The applicant shall
provide to the Commissioner, on or before the date of the hearing, a
certification that the notice of hearing has been so mailed.
(f) An evidentiary hearing shall be held by
the Commissioner pursuant to Chapter 590-4-6 of the Commissioner's Rules, and
the Georgia Administrative Procedure Act, O.C.G.A. §
50-13-1, et seq.
(g) The
applicant shall have the burden of proving the applicability of its claim for
exemption under O.C.G.A. §
10-5-11(9).
O.C.G.A. §
10-5-11(9).