§ 78A-30. Application to exchange securities.
§ 78A‑30. Applicationto exchange securities.
(a) When application ismade for approval to issue securities or to deliver other consideration(whether or not the security or transaction is exempt from registration orqualification other than by the provisions of G.S. 78A‑17(16) or notrequired to be qualified) in exchange for one or more bona fide securities,claims, or property interests, or partly in such exchange and partly in cash,the Administrator is expressly authorized to approve the terms and conditionsof such issuance and exchange or such delivery and exchange and the fairness ofsuch terms and conditions, and is expressly authorized to hold a hearing uponthe fairness of such terms and conditions, at which all persons to whom it isproposed to issue securities or to deliver such other consideration in suchexchange have the right to appear. Notice of such hearing shall be mailed byUnited States Mail, Postage Prepaid, to all persons to whom it is proposed toissue securities or to deliver such other consideration in such exchange, notless than 10 days prior to such hearing, and such notice shall be effectiveupon mailing. The application for approval to issue securities or to deliverother consideration shall be in such form, contain such information and beaccompanied by such documents as shall be required by rule or order of theAdministrator.
(b) The Administratorshall be required to hold a hearing on an application for approval within 30days after the filing of the application and supporting documents required byrule of the Administrator. Provided, however, if the securities or thetransaction regarding which the fairness hearing is sought are otherwise exemptfrom the registration provisions of this Chapter: (1) the Administrator shallhave until 45 days after the filing of the application and supporting documentsto hold a hearing on the application for approval; and (2) the hearing on theapplication shall not be held until at least 10 business days after the filingof the application.
(c) Within 10 businessdays after holding the hearing under subsection (a), the Administrator shallissue his approval or a statement that his approval will not be forthcoming.
(d) The Administrator'sauthority under this section shall extend to the issuance or the delivery ofsecurities or other consideration:
(1) By any entityorganized under the laws of this State; or
(2) In any transactionwhich is subject to the registration or qualification requirements of thisChapter or which would be so subject except for the availability of anexemption under G.S. 78A‑16 or G.S. 78A‑17, or by reason that thesecurity is a security covered under federal law.
(e) The provisions ofthis section shall be permissive only and no request for approval, failure torequest approval, withdrawal of a request for approval, or denial of approvalby the Administrator shall affect the availability of any exemption from theregistration or qualification requirements other than the exemption availableunder G.S. 78A‑17(16), and shall not be admissible as evidence in anylegal or administrative proceeding.
(f) This section isintended to provide for a fairness hearing before the Administrator withrespect to transactions which, if approved by the Administrator, would beexempt from the registration requirements of the federal securities laws undersection 3(a)(10) of the Securities Act of 1933, or any section comparablethereto which may subsequently be enacted.
(g) The Administratorshall charge a fee for a fairness hearing that the Administrator holds underthis section. The Administrator shall set the fee based upon the time andexpenses incurred by the Administrator. The fee may not be less than fivehundred dollars ($500.00), and it may not exceed five thousand dollars($5,000). (1979,c. 647, ss. 2, 3; 1987, c. 849, s. 8; 1997‑419, s. 8; 1998‑212, s.29A.9(c); 2001‑201, s. 14.)