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prescribe, and copies thereof, photostatic or otherwise, shall be furnished to every applicant therefor at such reasonable charge as the Commission may prescribe.

(b) The filing with the Commission of a declaration, or of an amendment to a declaration, shall be deemed to have taken place upon the receipt thereof by the Commission, but the filing of a declaration shall not be deemed to have taken place unless it is accompanied or preceded by payment to the Commission of a filing fee in the amount of $25, such payment to be made in cash or by United States postal money order or certified or bank check, or in such other medium of payment as the Commission may authorize by rule and regulation. If an amendment to a declaration is filed prior to the effective date of such declaration, the declaration shall be deemed to have been filed when such amendment was filed; except that an amendment filed with the consent of the Commission, prior to the effective date of the declaration, or filed pursuant to an order of the Commission, shall be treated as a part of the declaration. Amendments after the effective date of a declaration, including amendments for the purpose of rendering such declaration effective as to additional persons or as to the solicitation of assents, proxies, or deposits in respect of amendments to the plan to which such declaration relates, may be made upon such terms and conditions as the Commission may prescribe.

(c) A declaration filed under this section shall become effective within such reasonable period of time (but not less than twenty days) after the filing thereof as the Commission shall fix by rules and regulations, unless the Commission prior to the expiration of such period shall have issued an order to the declarant to show cause why such declaration should become effective. Within a reasonable time after an opportunity for hearing upon an order to show cause under this subsection, unless the declarant shall withdraw his declaration, the Commission shall enter either an order fixing the date on which such declaration shall become effective as filed or amended, or an order refusing to permit such declaration to become effective as to any one or more or all of the persons designated therein. Whenever the Commission shall issue an order to show cause, it shall cause the same to be served upon the agent for such service designated in the declaration, in such manner as the Commission may by rules and regulations prescribe, and accord an opportunity for hearing thereon (at a time fixed by the Commission) within ten days after such service.

(d) Any order fixing the date on which a declaration is to become effective may contain such terms and conditions as the Commission deems necessary or appropriate to assure compliance with the provisions of this act. If and when the Commission deems that the objections on which a refusal order purusant to section 6 or section 7 was based have been met, the Commission shall enter an order rescinding such refusal order, and the application shall become effective at the date fixed pursuant to subsection (c) of this section or upon the date of such rescission, whichever shall be the later.

(e) A declaration shall be deemed effective only as to the declarant and the authorized solicitors, if any, designated therein and the regular salaried employees of the declarant or such authorized solicitors, and only as to the acts specified in such declaration.

(f) The Commission is hereby empowered to make an investigation in any case in order to determine whether a refusal order should issue under section 6 or section 7, or whether a stop order should issue under section 9. If the declarant or any authorized solicitor designated in the declaration or any director, officer, employee, agent, or attorney of either shall fail to cooperate, or shall obstruct or refuse to permit the making of such investigation, such conduct shall be proper ground for the issuance of a refusal order.

REQUIRED FINDINGS

REORGANIZATIONS Sec. 6. (a) If a declaration filed pursuant to section 5 relates to solicitations in connection with a reorganization, the Commission shall not permit such declaration to become effective unless it finds

(1) That the declarant or, if the declarant is a committee or group, each member thereof, is either (A) the beneficial owner of securities of each of the classes to which the declaration relates, or (B) the representative of such a beneficial owner or owners;

(2) In case the declaration relates to the solicitation of proxies or deposits in respect of more than one class of securities, that there is no material conflict of interest between the several classes or that, in spite of such actual or potential conflict, it is necessary or appropriate in the public interest or for the protection of investors that declarant be permitted to represent such classes;

(3) That neither the declarant nor, if the declarant is a committee or group, any member thereof, (A) is the issuer, or (B) is or was an underwriter of any presently outstanding securities of the issuer, or (C) is or was, within one year prior to the filing of the declaration, a director, officer, partner, or employee of the issuer or of any such underwriter;

(4) That the solicitation of the proxy or deposit is to be on terms and conditions conforming to the requirements of subsection (a) of section 10; and

(5) In the case of solicitations in respect of the support, adoption, or approval of a reorganization plan, where the court, official, or agency before which such reorganization is pending has jurisdiction or is authorized by law to approve plans, that, after notice and opportunity for hearing at which all persons to be solicited had the right to appear, such plan has been approved as fair

and equitable

by such court, official, or agency, and in the case of an approval by a court, official, or agency of the United States or of a Territory (1) that prior to such approval such plan was referred to the Commission for report thereon, pursuant to section 13, and that, subject to the provisions of the last clause of subsection (a) of such seetion, a report of the Commission on such plan was submitted to such court, official, or agency; or (2) that such court, official, or agency has determined that the indebtedness of the issuer is less than $5,000,000;

(6) In the case of solicitations of proxies or deposits constituting an authorization to accept, approve, or assent to a reorganization plan, that such solicitations are to be made in respect of a specific plan.

VOLUNTARY READJUSTMENTS (b) If a declaration filed pursuant to section 5 relates to solicitations in connection with a voluntary readjustment, the Commission shall not permit such declaration to become effective unless it finds

(1) That the declarant or, if the declarant is a committee or group, each member thereof either (A) is the beneficial owner of securities of each class to which the declaration relates, or (B) is the representative of such a beneficial owner or owners, or (C) is the representative of a majority of the directors for the election of whom such class or each of such classes of securities was entitled to vote;

(2) In case the declaration relates to a solicitation in respect of more than one class of securities, that there is no material conflict of interest between the several classes or that, in spite of such actual or potential conflict, it is necessary or appropriate in the public interest and for protection of investors that declarant be permitted to represent such classes;

(3) That neither the declarant nor, if the declarant is a committee or group, any member thereof (A) is the issuer; or (B) is or was, within one year prior to the filing of the declaration, a director, officer, partner, or employee of the issuer, unless such declarant or member conforms to the requirements of clause (C) of paragraph (1) of this subsection (b); or (C) is or was an underwriter of any presently outstanding securities of the issuer; or (D) is or was, within one year prior to the filing of the declaration, a director, officer, partner, or employee of any such underwriter;

(4) That the solicitation of the proxy, deposit, or assent is to be on terms and conditions conforming to the requirements of subsection (a) of section 10; and

(5) In the case of assents or of proxies or deposits constituting an authorization to accept, approve, or assent to a plan of readjustment, that such solicitations are to be made in respect of a specific plan.

MUNICIPAL AND FOREIGN DEBT ARRANGEMENTS (c) If a declaration filed pursuant to section 5 relates to solicitations in connection with a municipal or foreign debt arrangement, the Commission shall not permit such declaration to become effective unless it finds—

(1) That the declarant or, if the declarant is a committee or group, each member thereof is either (A) the beneficial owner of securities of at least one of the classes to which the declaration relates, or (B) the representative of such a beneficial owner or owners;

(2) In case the declaration relates to the solicitation of proxies or deposits in respect of more than one class of securities, that there is no material conflict of interest between the several classes or that, in spite of such actual or potential conflict, it is necessary or appropriate in the public interest and for protection of investors that declarant be permitted to represent such classes;

(3) That either the declarant nor, if declarant is a committee or group, any member thereof (A) is or was an underwriter of any presently outstanding securities

of the issuer or (B) is or was, within one year prior to the filing of the declaration, a director, officer, partner, or employee of any such underwriter;

(4) That the solicitation of the proxy or deposit is to be on terms and conditions conforming to the requirements of subsection (a) of section 10; or

(5) In the case of solicitations of proxies or deposits constituting assents to a plan of debt arrangement, that such solicitations are in respect of a sepcific plan..

(d) If a State commission or other governmental agency having jurisdiction over such solicitation shall have informed the Commission that State laws applicable thereto have not been complied with, the Commission shall not permit a. declaration regarding such solicitation to become effective unless and until the Commission is satisfied that such compliance has been effected.

ADDITIONAL GROUNDS FOR ISSUANCE OF REFUSAL ORDER Sec. 7. The Commission may refuse to permit any declaration filed pursuant to section 5 to become effective if it finds

(1) That the declaration or prospectus does not conform to the requirements of this act and the rules and regulations thereunder;

(2) That the declaration or prospectus includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading;

(3) That the declarant or, if declarant is a committee or group, any member thereof owns or represents any securities, claims, or interests the ownership or representation of which is so likely to involve a material conflict with the interests of the owners of the securities to be solicited (whether by reason of the amount of such securities, claims, or interests so owned or represented, the nature or priorities thereof or the price at which the same were acquired, or for some other reason) as to make it necessary or appropriate in the public interest or for the protection of investors to disqualify declarant from occupying the fiduciary relationship toward such security holders which is contemplated by the declaration or from engaging in such solicitation;

(4) That the declarant or, if declarant is a committee or group, any member thereof is an associate of, or has some other direct or indirect connection with, any person who would be disqualified from being a declarant by paragraph 3 of the applicable subsection of section 6, or by paragraph 3 of this subsection, which association or connection is so likely to involve a material conflict with the interests of the owners of the securities to be solicited as to make it necessary or appropriate in the public interest or for the protection of investors to disqualify declarant from occupying the fiduciary relationship toward such security holders which is contemplated by the declaration or from engaging in such solicitation;

(5) That the declarant is being financed by, or is the nominee of, or has been delegated his powers and duties to, a person who would be disqualified from being a declarant by paragraph 3 of the applicable subsection of section 6 or by paragraph 3 of this subsection, or is otherwise utilizing the declaration in order to evade the purposes of this act;

(6) That the declarant has authorized any person to solicit proxies, deposits, or assents who would be disqualified from being a declarant;

(7) That the declarant or, if the declarant is a committee or group, any member thereof, of any person authorized to solicit proxies, deposits, or assents by or on behalf of any of the foregoing, has solicited or caused to be solicited any proxy, deposit, assent, or dissent in violation of any provision of this act or of any rule, regulation, or order thereunder, or has made any untrue statement of a material fact, or has omitted to state any fact necessary to make any statement not misleading, in connection with any such solicitation;

(8) That the solicitation of the proxy, deposit, or assent is not to be on terms and conditions conforming to the requirements of subsection (b) of section 10; or

(9) That, in the case of solicitations in respect of the support, proposal, adoption, or approval of a plan (A) such plan is not being properly proposed in good faith, or (B) such plan is not being properly proposed within the meaning of section 11, or (C) such plan does not conform to the requirements of section 12.

INFORMATION REQUIRED IN PROSPECTUS SEC. 8. The prospectus required by paragraph (2) of subsection (a) of section 4 shall contain

(1) Such of the information and documents contained in the declaration as the Commission may by rules and regulations or order prescribe as necessary or appropriate in the public interest or for the protection of investors; and

(2) Such additional information and documents as the Commission may by rules, regulations, or orders require as being necessary or appropriate in the public interest or for the protection of investors.

(3) In the case of a reorganization plan pending before a court, official, or agency of the United States or of any State or Territory having jurisdiction or authorized by law to approve plans, a copy of any opinion theretofore rendered by such court, official, or agency on the fairness and equity of such plan, or a summary thereof approved by such court, official, or agency; and

(4) A copy of any report made on the plan by the Commission pursuant to section 13, or a summary thereof approved by the Commission, in such form as the Commission may approve.

STOP ORDERS SEC. 9. (a) The Commission may at any time, after notice to the agent designated in the declaration for the purpose of receiving the same, by personal service or by the sending of such notice by registered mail or by the sending of confirmed telegraphic notice, and after opportunity for hearing (at a time fixed by the Commission) within fifteen days after such notice by personal service or the sending of such notice by registered mail or such telegraphic notice, issue a stop order suspending the effectiveness of a declaration as to any one or more or all of the persons as to whom such declaration is effective, if it finds that

(1) Such declaration or the prospectus filed therewith includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading;

(2) Any fact exists, a finding as to the existence of which would have necessitated or justified the entry of an order pursuant to section 6 or 7 refusing to permit such declaration to become effective; or

(3) Any person for whom a declaration is in effect, or any person acting for or on behalf of the declarant, is soliciting or has solicited any proxy, deposit, or assent in violation of any term, condition, restriction, or limitation in the order, or in any amendment or modification thereof, permitting such declaration to become effective or in violation of any provision of this act or of any rule, regulation, or order thereunder.

(b) Upon the issuance of any stop order, such declaration and all proxies, deposits, or assents solicited or obtained by the declarant pursuant thereto shall cease to be effective for any purpose, unless and to the extent that the Commission may otherwise provide in such order, and the declarant shall take such steps as the Commission may deem necessary or appropriate in the public interest or for the protection of investors, to cancel or cause to be canceled the same, to return or cause to be returned all deposited securities to the persons entitled thereto, and to give notice, to interested security holders and any court, official, or agency having jurisdiction in the premises, of the issuance and the effect of such stop order, and otherwise to prevent evasion of the purposes of this act.

(c) If any declarant or any counsel, agent, depositary, or employee of a declarant shall fail to cooperate or shall obstruct or refuse to permit the making of an examination, such conduct shall be ground for the issuance of a stop order. TERMS AND CONDITIONS ON WHICH SOLICITATION OF PROXIES, DEPOSITS, OR

ASSENTS Is To BE MADE Sec. 10. (a) For the purposes of paragraph (4) of subsections (a), (b), and (c) of section 6, it is required that every solicitation of proxies, deposits, or assents be on such terms and conditions (to be expressed in the prospectus and/or in such proxy or assent or in a certificate of deposit, deposit agreement, or other instrument) that the solicitation and receipt of such proxy, deposit, or assent will constitute an agreement containing

(1) Adequate provisions for review and determination of fees and expenses of the declarant, after notice and opportunity for a hearing to all interested parties, by a designated independent person or governmental agency having jurisdiction or authorized by law to exercise such function;

(2) Adequate provisions for at least an annual report and an accounting by declarant to those represented by it, in such form as the Commission may require or approve; and for the filing of copies of such report and accounting with the Commission:

(3) Adequate prohibitions against declarant or, if declarant is a committee or group, any member of such committee or group, and against any person who is a director, officer, or employee or of attorney for, or is directly or indirectly controlled by any of the foregoing, (A) buying or selling any securities of the issuer

or certificates of deposit therefor so long as the rights and powers conferred upon declarant or upon such person by such proxy, deposit, or assent shall continue to be effective, or (B) being or becoming pecuniarily interested, directly or indirectly (except on behalf of the securities to be represented by declarant), in any contracts, arrangements, or undertaking with the issuer or with any successor company, or their respective nominees or agents, with respect to any matter or matters whatsoever except exchanges or subscriptions (other than underwritings) under the plan, or participation in the management of the continuing or successor company, as director, officer, or employee;

(4) Adequate provisions to the effect that the authority conferred by the proxies, deposits, or assents to be solicited shall cease, and any deposited securities shall be returned to the respective depositors —

(A) if and when the declaration shall cease to be effective, unless and to the extent that the Commission shall otherwise provide in its order suspending the effectiveness of such declaration, and subject to such terms and conditions as may be contained in such order; and

(B) in the case of solicitations in respect of the support, adoption, approval, or disapproval of a reorganization plan pending before a court, official, or agency of the United States or of any State or Territory having jurisdiction or authorized by law to approve plans, (i) if and when such court, official or agency shall have rescinded its approval thereof or (ii) if and when such plan shall be amended, unless such court, official, or agency finds that such amendment does not materially adversely affect the fairness or equity of such plan; and

(C) in the case of solicitations in respect of a plan of readjustment, (i) if reorganization proceedings are instituted by or against the issuer and (ii) if, in the case of such proceedings instituted against the issuer and not consented

to by the issuer, such proceedings have not been dismissed within sixty days; (5) Provisions to the effect that the authority conferred by any deposit to be solicited shall be limited (A) to the tender of the deposited securities in order to bid for or purchase all or part of the assets of the issuer at judicial or foreclosure sale, pursuant to the plan in connection with which such deposit was solicited, where such tender is necessary under applicable law; (B) to the tender of the deposited securities in order to effect an acceptance of the terms of the plan or an exchange of such securities pursuant to the terms thereof, when so provided in the plan; (C) to constituting declarant trustee of an express trust, where such trusteeship is necessary under applicable law in order to permit declarant to maintain suits at law or in equity necessary or appropriate for the protection of investors; (D) to such authority only as is necessary to enable declarant to collect on behalf of the depositor, interim or partial payments or distributions on account of the securities deposited; or (E) to such other authority as may be established to the satisfaction of the Commission as necessary for the protection of investors.

(b) For the purposes of paragraph (8) of subsection (a) of section 7, it is required that every solicitation of proxies, deposits, or assents be on such terms and conditions (to be expressed in the prospectus and/or in such proxy or assent, or in a certificate of deposit, deposit agreement, or other instrument) that the solicitation and receipt of such proxy, deposit, or assent will constitute an agreement containing

(1) Such limitations or restrictions on the employment by declarant of any attorney or any firm of attorneys which has, or which has represented, materially conflicting interests as the Commission, by rule, regulation, or order, may prescribe as necessary or appropriate in the public interest or for the protection of investors;

(2) Such limitations upon the rights and powers conferred upon the declarant, including, without limitation of the generality of the foregoing, the right and power of the declarant to create a lien upon the deposited securities, or to impose conditions or restrictions upon the right to deposit and the depositor's right to withdraw, and provisions imposing such duties and liabilities upon declarant, and such other provisions, including provisions prohibiting the failure of the owner of the deposited security to dissent from having the same effect as an affirmative assent, requiring independent review and determination of any condition or fact affecting the rights of security holders thereunder, and protecting minorities against oppressive or inequitable practices, as the Commission, by rule, regulation, or order, may prescribe as necessary or appropriate in the public interest or for the protection of investors, in light of the fiduciary relationship to be assumed by declarant or by such person and the purpose or purposes for which such proxies, deposits, or assents are to be solicited.

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