                                 CODE OF VIRGINIA

REGISTRATION BY NOTIFICATION (§ 13.1-508)

A. The following securities may be registered by notification:

   1. Any security whose issuer (which, for the purposes of this subsection,
   shall include any predecessor by merger, consolidation or acquisition of
   assets) has been in continuous operation for at least five years if there has
   been no default within the past three fiscal years in the payment of
   principal, interest or dividends on any security of the issuer with a fixed
   maturity or a fixed interest or dividend provision, and (where the security
   being registered does not have a fixed maturity or a fixed interest or
   dividend provision) (a) the issuer is a corporation which has assets of at
   least $500,000 after deduction of depreciation and other reserves, which has a
   net worth of at least $10,000, which is incorporated under the laws of this
   Commonwealth and which conducts a substantial portion of its business in this
   Commonwealth, or (b) the issuer during its past three fiscal years has had
   average net earnings applicable to all securities without a fixed maturity or
   a fixed interest or dividend provision (whether of one or more classes)
   outstanding at the date when the registration statement is filed (i)
   aggregating at least five percent of the amount of such outstanding securities
   as measured by their maximum public offering price or their market price on a
   day within 30 days of the date of filing the registration statement, whichever
   is higher, or their book value on a day within 90 days of the date of filing
   the registration statement if there is neither a readily determinable market
   price nor a public offering price or (ii) if no such securities are
   outstanding, then aggregating at least five percent of the amount of such
   securities then offered for sale based upon the maximum price at which such
   securities are to be offered for sale; and all accounting determinations
   required by this section shall be made in accordance with generally accepted
   accounting practices. Noncumulative preferred stock shall be deemed for the
   purposes of this subsection a security with a fixed dividend provision.

   2. Any security registered for nonissuer distribution if (i) any security of
   the same class has ever been registered or (ii) the security being registered
   was originally issued pursuant to an exemption in this chapter.

B. A registration statement under this section shall state the facts showing
eligibility of the securities for registration by notification, the amount and
maximum offering price of the securities proposed to be offered in this
Commonwealth, and a copy of any prospectus to be used in connection with the
offering. It shall be accompanied by a fee of 1/20 of one percent of the maximum
offering price of the securities proposed to be offered in this Commonwealth;
provided that the fee shall not be less than $100 nor more than $250.

C. If no stop order is in effect and no proceeding for the issuance of a stop
order is pending, a registration statement under this section shall
automatically become effective at three o&#8217;clock in the afternoon of the
second full business day after filing of the registration statement or the last
amendment thereto or at such earlier time as the Commission may determine by
order, letter, telegram, or electronic means.

D. The Commission may require that a prospectus be used in connection with the
offering. If the Commission requires the use of a prospectus, it shall be
unlawful to sell any security registered under this section except upon delivery
of a prospectus to each person to whom an offer is made. The prospectus shall
contain such information specified in subsection (b) of &#xA7; 13.1-510 as may
be designated by the Commission as necessary for the protection of investors and
such additional information as the Commission may require.

HISTORY: 1956, c. 428; 1981, c. 168; 1984, c. 771; 1993, c. 179; 2003, c. 595.