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California Corporations Code Section 25507

Legal Research Home > California Laws > Corporations Code > California Corporations Code Section 25507

25507.  (a) No action shall be maintained to enforce any liability
created under Section 25503 (or Section 25504 or Section 25504.1
insofar as they relate to that section) unless brought before the
expiration of two years after the violation upon which it is based or
the expiration of one year after the discovery by the plaintiff of
the facts constituting such violation, whichever shall first expire.
   (b) No buyer may commence an action under Section 25503 (or
Section 25504 or Section 25504.1 insofar as they relate to that
section) if, before suit is commenced, such buyer shall have received
a written offer approved as to form by the commissioner (1) stating
the respect in which liability under such section may have arisen,
(2) offering to repurchase the security for a cash price payable upon
delivery of the security or offering to pay the buyer an amount in
cash equal in either case to the amount recoverable by the buyer in
accordance with Section 25503, or, offering to rescind the
transaction by putting the parties back in the same position as
before the transaction, (3) providing that such offer may be accepted
by the buyer at any time within a specified period of not less than
30 days after the date of receipt thereof unless rejected earlier
during such period by the buyer, (4) setting forth the provisions of
this subdivision (b), and (5) containing such other information as
the commissioner may require by rule or order, and such buyer shall
have failed to accept such offer in writing within the specified
period after receipt thereof.
   (c) The commissioner may by rule or order impose as a condition to
approval of an offer under subdivision (b) of this section, if the
commissioner finds such action is necessary and appropriate for the
protection of investors, conditions requiring:
   (1) That equivalent and concurrent offers be made to all investors
as to whom liability may have arisen and still exists under Section
25503 (or Section 25504 or Section 25504.1 insofar as they relate to
that section) in connection with the distribution or transaction;
   (2) That the offer be made subject to a condition voiding such
offer if the issuer, by reason of acceptances, is disabled from
commencing or continuing business;
   (3) That the offer be made within a specified period after
approval thereof by the commissioner;
   (4) If the consideration paid by the offeree was other than
monetary or if the offer is of rescission, and if the offer is
rejected by the offeree on the ground that it does not accord him the
damages payable under Section 25503 or that the rescission offered
does not place the parties back in the same position as before the
transaction, that an offer so rejected shall not bar the commencement
of an action by the offeree under Section 25503 (or Section 25504 or
Section 25504.1 insofar as they relate to that section); or
   (5) That the offeror file a report or reports with the
commissioner containing such information as he may require concerning
the making of the offer, its acceptance or rejection, and compliance
with its terms and conditions or with conditions imposed under this
subdivision.
   (d) Each person who files a repurchase offer with the commissioner
pursuant to subdivision (b) shall file with the commissioner, in
such form as the commissioner by rule prescribes, an irrevocable
consent appointing the commissioner or the commissioner's successor
in office to be such person's attorney to receive service of any
lawful process in any noncriminal suit, action or proceeding against
such person or such person's successor, executor or administrator,
which arises under this law or any rule or order hereunder after the
consent has been filed, with the same force and validity as if served
personally on the person filing the consent. A person who has filed
such a consent in connection with a qualification under this law (or
application for a permit under any prior law if the application under
this law states that such consent is still effective) need not file
another. Service may be made by leaving a copy of the process in the
office of the commissioner but it is not effective unless (1) the
plaintiff, who may be the commissioner in a suit, action or
proceeding instituted by him, forthwith sends notice of the service
and a copy of the process by registered or certified mail to the
defendant or respondent at such person's last address on file with
the commissioner, and (2) the plaintiff's affidavit of compliance
with this section is filed in the case on or before the return day of
the process, if any, or within such further time as the court
allows.

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Last modified: March 17, 2014