N.Y. ACA Law § 23.03 — New York Code / Act ACA / Title F / Article 23 / Section 23.03
Definitions
Status: in_force

§ 23.03. Definitions. 1. The following terms, whenever used or\nreferred to in this article, shall have the following meanings, unless\nthe context clearly requires otherwise:\n  (a) A "theatrical production" shall mean those live-staged dramatic\nproductions, dramatic-musical productions and concerts, as defined in\nthis subdivision, which hereafter are shown to the public for profit and\nwhich are financed wholly or in part by the offering or sale in or from\nthis state, directly, or through agents or distributors, of investment\nagreements, evidences of interest, limited partnerships, producer\nshares, equity or debt securities, pre-organization subscriptions or any\nother syndication participation, when any persons are offered, solicited\nto purchase or sell, directly or indirectly, such syndication interests\nfor moneys or services within or from the state of New York; provided,\nhowever, that for purposes of paragraphs (h) and (i) of this subdivision\na "theatrical production" shall mean any live-staged dramatic\nproduction, dramatic-musical production or concert which is presented to\nthe public in a place of entertainment as defined in this subdivision.\n  (b) "Fraud", "deceit", and "defraud", as such terms are used in this\narticle, are not limited to common-law deceit.\n  (c) "Syndication" shall mean all forms, methods and devices for\npooling of investment funds for the chief purpose of participating in a\ntheatrical production company, as defined herein.\n  (d) A "principal" shall mean and include every person or firm directly\nor indirectly controlling the business affairs or operations of a\ntheatrical production company or of a ticket distributor, as defined\nherein.\n  (e) A "person" shall mean an individual, firm, company, partnership,\ncorporation, trust or association.\n  (f) A "concert" shall mean any live performance whether musical or\nspoken, dramatic or nondramatic, by one or more performers, which is\npresented to the public in a place of entertainment, as defined in this\nsubdivision.\n  (g) A "sporting event" shall have the same meaning as set forth in\nsubdivision three of section 23.23 of this article.\n  (h) The term "event" shall mean a theatrical production or sporting\nevent, as those terms are defined in this subdivision, or any other\npublic exhibition, game, show, contest or performance which is presented\nto the public in a place of entertainment as defined in this\nsubdivision.\n  (i) A "place of entertainment" shall mean a theatre, dinner theatre,\nhall, coliseum, convention center, arena, auditorium, stadium, concert\nhall, garden, outdoor space or other place of amusement operated as a\nfor profit entity and located in this state in which theatrical\nproductions, sporting events or other events are presented.\n  (j) A "theatrical production company" shall mean any entity formed to\n(i) develop, produce, invest in or otherwise exploit, or any combination\nthereof, one or more specified or nonspecified theatrical productions,\nand (ii) conduct all activities related thereto.\n  (k) The term "advance ticket" shall mean a ticket of admission sold\nmore than twelve hours in advance of the time of performance of the\nevent for which the ticket is purchased.\n  (l) The term "ticket distributor" shall have the same meaning as set\nforth in subdivision one of section 23.23 of this article.\n  (m) The term "accredited investor" shall mean (i) a natural person\nwhose individual net worth (or joint net worth with his or her spouse)\nwill exceed one million dollars at the time of purchase, or (ii) a\nnatural person who has an individual income (exclusive of any income\nattributable to a spouse) of more than two hundred thousand dollars for\nthe past two years or joint income with a spouse of more than three\nhundred thousand dollars in each of those years and has a reasonable\nexpectation of reaching the same income level in the current year, or\n(iii) an entity in which each equity owner is an accredited investor\nunder subparagraph (i) or (ii) of this paragraph, or (iv) either an\norganization described in section 501 (C)(3) of the Internal Revenue\nCode of 1986, as amended, a corporation, a Massachusetts or similar\nbusiness trust, or a partnership, in each case not formed for the\nspecific purpose of acquiring the securities being offered, and with\ntotal assets in excess of five million dollars, or (v) a trust, with\ntotal assets in excess of five million dollars, not formed for the\nspecific purpose of acquiring the securities, whose purchase of the\nsecurities is directed by a person who has such knowledge and experience\nin business and financial matters that he or she is capable, as defined\nby the Securities Act of 1933, as amended, of evaluating the merits and\nrisks of the prospective investment, or a bank, as defined in section\n3(a)(2) of the Securities Act of 1933, as amended, (A) acting in its\nfiduciary capacity as trustee, or (B) subscribing for the purchase of\nsecurities being offered on its own behalf.\n  2. Accurate books and records of account shall be maintained by each\ntheatrical production company. Every producer of a theatrical production\nshall at least once for each twelve month fiscal period beginning with\nthe initial expenditure of investors' funds (other than those of any\nprincipal), within four months after the end of such period or the last\npublic performance of the original production in New York state,\nwhichever is sooner, furnish to all investors and to the department of\nlaw a written balance sheet and statement of profit and loss which shall\nbe prepared by an independent public accountant and contain an express\nopinion by such accountant that such statements fairly present the\nfinancial position and results of operations of the theatrical\nproduction company, hereinafter referred to as "certified statement".\nNotwithstanding the aforesaid, in no event shall a producer be required\nby this subdivision to submit certified statements to investors for any\nperiod less than twelve months following the period covered by a prior\ncertified statement. Irrespective of the aforesaid, and in addition\nthereto, every such producer shall also furnish each investor and the\ndepartment of law with an accurate and truthful itemized statement of\nincome and expenditure for every six month period not covered by a\npreviously issued certified statement or a certified statement required\nto be issued hereunder for a period ending at such time, which\nadditional statement shall be subscribed to by the producer as accurate,\nand may be submitted within three months after the close of such six\nmonth period. Following the last public performance in New York state of\nthe original production, the producer shall accurately report to the\ninvestors and the department of law, at least once within four months\nafter the end of each year thereafter, with respect to any subsequent\nearnings or expenditures by the theatrical production, which shall be\ntruthful and accurate and which shall be subscribed to by the producer\nas accurate. The attorney general may adopt, promulgate, amend and\nrescind rules and regulations setting forth other accounting\nrequirements than set forth above, which may be selected by a producer\nin lieu of the accounting requirements set forth above. Upon conditions\nset forth by the attorney general, such rules and regulations may\nfurther provide for the issuance of an exemption from the requirements\nherein (i) for offerings of less than two hundred fifty thousand\ndollars, (ii) for offerings made to less than thirty-six persons in or\nfrom this state, or (iii) for such other offerings and upon such other\ngrounds as may be determined by the attorney general.\n  This subdivision shall not apply to any production whose first\nperformance in New York state preceded June first, nineteen hundred\nsixty-four.\n  3. (a) Except as otherwise provided herein, no offering of syndication\ninterests in a theatrical production company, as defined herein, shall\nbe made within or from this state without the use of a prospectus or\noffering circular making full and fair disclosure of material facts\npertaining to the particular venture. The attorney general may also\nissue rules and regulations requiring the submission to prospective\ninvestors in such offerings an offering circular and amendments thereto\ncontaining a concise and accurate description of the nature of the\noffering, profits to promoters and others, the background of the\nproducers, a description of subsidiary rights and other pertinent\ninformation as will afford potential investors or purchasers and\nparticipants an adequate basis upon which to found their judgment, but\nthe attorney general shall accept offering literature filed with the\nSecurities and Exchange Commission and authorized for use by such agency\nas complying therewith as of the date of receipt of a true copy by the\ndepartment of law of such literature and proof of authorization by the\nSecurities and Exchange Commission by affidavit or otherwise. The\nattorney general may also provide for the method of filing of offering\nliterature other than that filed with the Securities and Exchange\nCommission, as well as underlying documents, with the department of law\nat its office in the city of New York, prior to the offering of the\nsyndication interest involved; however, any such regulation also shall\nprovide that all funds derived from the sale of such theatrical\nsyndication interests shall be held in trust in a special bank account\nuntil the attorney general has issued to the issuer or other offeror a\nletter stating that the offering has been permitted to be filed; but in\nthat event such regulation promulgated by the attorney general shall\nalso provide that the attorney general, not later than fifteen days\nafter such submission, shall issue such a letter or, in the alternative,\na notification in writing indicating deficiencies therein.\n  (b) Where not more than one million dollars is the total amount of the\ntheatrical offering, including the right to an involuntary overcall, the\nprovisions of this subdivision shall be deemed to be satisfied by the\nuse of an investment agreement clearly setting forth in easily readable\nprint all of the terms of the offering. A copy of such document may be\nfiled with the department of law in lieu of a prospectus or offering\ncircular in the manner set forth in this article and shall be deemed to\nbe offering literature.\n  (c) The provisions of this subdivision shall not apply to offerings to\nfewer than thirty-six persons (plus an unlimited number of accredited\ninvestors) where express waivers in writing to the filing and offering\ncircular requirements of this subdivision are filed with the department\nof law by or on behalf of all investors.\n  4. A limited partnership that is a theatrical production company is\nexempt from the requirement for publishing its certificate or notice\nunder sections ninety-one, 121-201 and 121-902 of the partnership law so\nlong as the words "limited partnership" appear in its name. A limited\nliability company that is a theatrical production company is exempt from\nthe requirement for publishing its articles of organization, application\nfor authority or a notice containing the substance thereof under\nsections two hundred six and eight hundred two of the limited liability\ncompany law so long as the words "limited liability company" appear in\nits name.\n  5. It shall be unlawful for any person, in connection with the offer,\nsale, or purchase of any syndication interest in any theatrical\nproduction company, as defined herein, directly or indirectly:\n  (a) To employ any device, scheme, or artifice to defraud;\n  (b) To willfully make any untrue statement of a material fact or to\nomit to state a material fact necessary in order to make such statement\nmade, not misleading; or\n  (c) To engage in any act, practice, or course of business which he\nknows or reasonably should have known operates or would operate as a\nfraud or deceit upon any person.\n  6. Any person, partnership, corporation, company, trust or association\nor any agent or employee thereof, who (or which), having engaged in any\nact or practice constituting a violation of subdivision five of this\nsection, commits additional acts under such circumstances as to\nconstitute a felony, the crime of conspiracy, petit larceny, or more\nthan one of the aforesaid, shall be punishable therefor, as well as for\nthe violation of subdivision five of this section, and may be prosecuted\nfor each crime, separately or in the same information or indictment,\nnotwithstanding any other provision of law.\n