(a) An offer as to which the target company, acting through its board of directors, recommends acceptance to its shareholders, if at the time such recommendation is first communicated to the shareholders, the offeror has filed a notice with the commission containing the following: (i) the information specified in section 13(d) of the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C. 78a et seq.), (ii) an undertaking to notify security holders of the target company that a notice has been filed with the commission which contains substantial additional information about the offering, which notice is available for inspection at the commission's principal office during business hours, (iii) such facts as are necessary to establish this exemption and (iv) the fee specified in section 10.²

(b) Any security or offer to purchase any security as to which the commission by regulation or order finds that registration is not necessary or appropriate for the protection of investors.