Section 3(a)(10) of the Securities Act of 1933 (the “Act”) provides an exemption from the registration requirement for securities under the following criteria:
- The securities must be issued in exchange for a bona fide claim; and
- The terms of the issuance and exchange must be found by a court to be fair to those receiving shares; and
- Notice of the hearing must be provided to those to receive shares and they must be afforded the opportunity participate in a fairness hearing; and
- The issuer must advise the court prior to a fairness hearing that it intends to rely on the exemption provided in Section 3(a)(10) of the Act; and
- There cannot be any impediments to the appearance of interested parties at the fairness hearing.
An experienced 3(a)(10) securities lawyer represents public companies and debt holders with bona fide claims in 3(a)(10) settlement agreements and drafts legal opinions for clearing restricted stock subject to a court order following litigation under 3(a)(10).