Current through Register Vol. 54, No. 12, March 23, 2024
(a)
Automatic waiver. Under
section 204(a) of the act (70 P.S. §
1-204(a)), the restriction
under section 203(d)(i) of the act (70 P.S. §
1-203(d)(i)) not to sell
securities purchased under that section for 12 months after the date of
purchase automatically is waived if:
(1) The
203(d) restricted securities are registered under the act, the Securities Act
of 1933 (15 U.S.C.A.
§§
77a-77aa) or the
Securities Exchange Act of 1934 (15 U.S.C.A. §§
78a-78qq) after a notice is filed with
the Department under section 203(d) of the act and §
203.041 (relating to limited
offerings).
(2) The purchaser dies
or becomes disabled or incompetent and a legal guardian for the purchaser is
appointed.
(3) The purchaser
undergoes liquidation or dissolution if the action is not undertaken to avoid
registration.
(4) The purchaser
becomes insolvent.
(5) The issuer
is merged into another entity and new securities are exchanged for the 203(d)
restricted securities, if the merger is not undertaken to avoid registration of
the 203(d) restricted security.
(6)
The 203(d) restricted securities are sold in a transaction in which an offer to
purchase on the same terms is made to all securityholders of that class of the
issuer's securities.
(7) A
rescission offer is made in connection with a potential violation of State or
Federal securities laws.
(8) The
203(d) restricted securities are subject to repurchase under a buy-sell
agreement that is conditioned with terms of employment or other commercial, as
opposed to, mere investment relationship.
(9) The 203(d) restricted securities are to
be exchanged for other securities of the issuer in a transaction exempt from
registration under section 202 of the act (70 P.S. §
1-202) or section 203 of the act, if the
exchange is not undertaken to avoid registration.
(b)
Resale agreement. For
transactions undertaken in reliance on waivers provided in subsection (a)(3)
and (4), the person acquiring the restricted securities and the issuer shall
agree in writing at the time of sale not to resell the restricted securities
before the expiration of the original 12-month holding period.
(c)
Discretionary waiver.
(1) In addition to the automatic waivers set
forth in subsection (a), persons may make application to the Department under
section 204(a) of the act for a discretionary order to waive the 12-month
holding period for a restricted security in a proposed specified
transaction.
(2) The applicant
shall demonstrate in the application that the sale of the restricted security
is not being undertaken to avoid registration or otherwise to distribute in
violation of the act.
The provisions of this §
204.011 amended under sections
202(g) and (i), 203(d), (i.1), (j) and (n)-(t), 204(a), 205(b), 207(g), (j.1)
and (n), 209(b), 211(a) and (b), 504(d), 513, 603(a), 606(d) and 609(a) of the
Pennsylvania Securities Act of 1972 (70 P.S. §§
1-202(g) and (i),
1-203(d), (i.1), (j) and
(n)-(t), 1-204(a), 1-205(b), 1-207(g), (j.1) and (n), 1-209(b), 1-211(a) and
(b), 1-504(d), 1-513, 1-603(a), 1-606(d) and 1-609(a)); section 202.C of the
Department of Banking and Securities Code (71 P.S. §
733-202.C); and section 9(b) of the Takeover
Disclosure Law (70 P.S. §
79(b)).
This section cited in 10 Pa. Code §
203.041 (relating to limited
offerings).
