draft illinois state crowdfunding exemption 2014

8/10/2019 Draft Illinois State Crowdfunding Exemption 2014

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I I U ~ I I ~ J I I I ~ I I I ! 1 ~ 1 ~ 1 I 1 ! 1 1 1 1 ~ 1 1 1 ~ 1 1 1 ! I I I I J I ~ 1~ I I I [ I I I ~ 1 I I I J I I I J l l l l j I I I I J I I I I J ~ 1 1~ I I I I I [ 1 1 1 1 1

98TH GENERAL ASSEMBLY

State of Illinois

2013 and 2014

INTRODUCED , BY

SYNOPSIS AS INTRODUCED:

See I ndex

Ame nds t h e I l l i n oi s Se c ur i t i e s L a w o f 1953. Cr e at e s a n e xe mpt i o n f r o m

cer t ai n f i l i ng and r egi st r at i on r equi r ement s under t he Act f or i nt r ast at e

secur i t i es of f er i ngs t hat meet cer t ai n condi t i ons, i ncl udi ng t hat ( 1) t he

of f er i ng meet s al l of t he r e qui r e ment s of t he f eder a l exempt i on f or

i nt r ast at e of f er i ngs pr ovi ded under t he Secur i t i es Exchange Act of 1933;

( 2) t he a ggr e ga t e pur c ha se pr i c e of al l s e cur i t i es s o l d by a n i s s u er wi t h i n

any 12- mont h per i od does not exceed cer t ai n monetar y l i mi t at i ons; and ( 3)

the aggregate amount sold to any purchaser in an offering of securities

made wi t hi n any consecut i ve 12- mont h per i od does not exceed cer t ai n

monetar y l i mi t ati ons. Provi des t hat an i ssuer may make an of f eri ng or sal e

of secur i t i es t hr ough t he use of one or mor e qual i f i ed I nt er net por t al s,

subj ect t o cer t ai n r equi r ement s, i ncl udi ng t hat (i) t he I nt er n et por t al

shal l at al l t i mes be owned by a cor por at i on. or ot her l egal ent i t y whi ch i sei t her or gani z ed under t he l aws of , or i s ot her wi s e qual i f i ed t o do

bus i nes s i n, t hi s St at e; ( i i ) t he I nt er net por t al s hal l es t abl i s h and

mai nt ai n c ommer c i al l y r e as onabl e meas ur e s t o l i mi t ac ces s t o any

i nf or mat i on concer ni ng an of f eri ng or sal e of t he subj ect secur i t i es t o

r e s i dent s of t hi s St at e; and ( i i i ) t he I nt er n et por t al s hal l es t a bl i s h and

mai nt ai n a secur e met hod of conumi ni cat i on t hr ough t he I nt er net por t al

i t sel f t hat wi l l permi t potent i al i nvest ors t o communi cat e wi t h one another

and wi t h r epresent at i ves of t he i ssuer about t he of f er i ng. Requi r es t he

Sec r et ar y of St at e t o c ol l ec t a $100 f ee f or s ec ur i t i es of f er e d or s ol d

under t he exempt i on cr eat ed under t hi s amendat ory Act : and a $300 f ee f or

t he r egi st r at i on and r enewal of a qual i f i ed I nt er net por t al .

LRB098 22997 KTG 61957 b

FISCAL NOTE ACT

MAY APPLY

A BILL FOR


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1 AN ACT concer ni ng busi ness .

LRB098 22997 KTG 61957 b

2 Be it enacted by the People of the State of Il linois,

3 represented in the General Assembly:

4 Sec t i on 5. The I l l i noi s Sec ur i t i es Law of 1953 i s amended

5 by changi ng Sect i ons 4, 11a, and 18. 1 and by addi ng Sect i ons

6 2. 34, 2. 35, 2. 36, 2. 37, and 8d as f ol l ows:

7 ( 815 I LCS 5/ 2. 34 new)

8 Sec. 2. 34. Accr edi t ed i nves t or . " Accr edi t ed i nves t or " has

9 t he meani ng gi ven t o t hat t er m i n 17 CFR 230. 501( a) , as amended

10 and i n ef f ect f r om t i me t o t i me.

11 ( 815 I LCS 5/ 2. 35 new)

12 Sec. 2. 35. Qual i f i ed escr owee. "Qual i f i ed escr owee" means

13 a per s on, f i r m, par t ner s hi p, ass oci at i on, cor por at i on, or

14 ot her l egal ent i t y who: ( a) f al l s under t he def i ni t i on of

15 "t i t l e i nsur ance company" under , and pur suant t o t he t er ms and

16 r equi r ement s of , t he Ti t l e I ns ur ance Act ; or ( b) i s cer t i f i ed

17 as an i ndependent escr owee under , and pur suant t o t he t er ms and

18 r equi r ement s of , t he Ti t l e I ns ur anc e Ac t .

19 ( 815 I LCS 5/ 2. 36 new)

20 Sec. 2. 36. Qual i f i ed I nt er net por t al . " Qual i f i ed I nt er net

21 por t al " means an I nt er net por t al mai nt ai ned by a cor por at i on or


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t o of f er or sel l

of Sect i on 8d of

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ot her l egal ent i t y t hat i s bei ng used

secur i t i es and t hat meet s t he r egui r ement s

t hi s Act .

4 ( 815 I LCS 5/ 2. 37 new)

5 Sec. 2. 37. Exper i enced i nves t or . " Exper i enced i nves t or "

6 means:

7 ( a) a nat ur al per s on whos e i ndi vi dual i ncome exceeded

8 $150, 000, or j oi nt i ncome wi t h t hat per son' s spouse

9 exc eeded $200, 000, i n each of t he 2 mos t r ecent year s , and

10 s uch per s on has a r eas onabl e expect at i on of r eachi ng t he

11 s ame i ncome l evel i n t he cur r ent year ;

12 ( b) a nat ur al per s on whos e i ndi vi dual net wor t h exceeds

13 $500, 000, or j oi nt net wor t h wi t h t hat per s on' s s pous e,

14 exceeds $750, 000, pr ovi ded t hat net wor t h f or pur pos es of

15 t hi s s ubs ect i on s hal l be c al c ul at ed i n t he s ame manner as

16 pr ovi ded i n 17 CFR 230. 50l ( a) j

17 ( c) a nat ur al per son who has passed t he Ser i es 7 and

18 t he Ser i es 63 l i cens i ng exams , or t he Ser i es 66 l i cens i ng

19 exam, or who i s ot her wi s e l i c ens ed i n t he St at e t o pr a ct i c e

20 as an account ant or f i nanci al pl anner ;

21 ( d) a nat ur al per son who has r ecei ved an advanced

22 degr ee ( a mast er ' s degr ee or hi gher ) i n f i nance or

23 account i ng f r om an accr edi t ed educat i onal i ns t i t ut i on or

24 has compl et ed a St at e r ecogni z ed s ecur i t i es i nves t ment

25 t r ai ni ng pr ogr am;


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) - 3 - LRB098 22997 KTG 61957 b


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1 f or al l Ur ban Cons umer s publ i s hed by t he Uni t ed St at es

2 Depar t ment of Labor , Bur eau of Labor St at i st i cs, r oundi ng each

3 dol l ar l i mi t at i on t o t he near est $10, 000.

4 ( 815 I LCS 5/ 4) ( f r omCh. 121 1/ 2, par . 137. 4)

5 Sec. 4. Exempt t r ans ac t i ons . The pr ovi s i ons of Sec t i ons 2a,

6 5, 6 and 7 of t hi s Act s hal l not appl y t o any of t he f ol l owi ng

7 t r ansact i ons, except wher e ot her wi se speci f i ed i n t hi s Sect i on

8 4:

9 A. Any of f er or sal e, whet her t hr ough a deal er or

10 ot her wi s e, of s ecur i t i es by a per s on who i s not an i s suer ,

11 under wr i t er , deal er or c ont r ol l i ng per s on i n r es pect of s uc h

12 secur i t i es, and who, bei ng t he bona f i de owner of such

13 s ecur i t i es , di s pos es t her eof f or hi s or her own account ;

14 pr ovi ded, t hat s uch of f er or s al e i s not made di r ect l y or

15 i ndi r ect l y f or t he benef i t of t he i s suer or of an under wr i t er

16 or c ont r o l l i ng per s on.

17 B. Any of f er , s al e, i ss uance or exchange of secur i t i es of

18 t he i s suer t o or wi t h s ec ur i t y hol der s of t he i s suer exc ept t o

19 or wi t h per s ons who ar e s ec ur i t y hol der s s ol el y by r eas on of

20 hol di ng t r ansf er abl e war r ant s , t r ansf er abl e opt i ons , or

21 s i mi l ar t r ans f er abl e r i ght s of t he i s s uer , i f no c ommi s s i on or

22 ot her r emuner at i on i s pai d or gi ven di r ec t l y or i ndi r ec t l y f or

23 or on account of t he pr ocur i ng or s ol i ci t i ng of s uch s al e or

24 exc hange ( ot her t han a f ee pai d t o under wr i t er s bas ed on t hei r

25 under t aki ng t o pur c hase any s ecur i t i es not pur c hased by


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1 secur i t y hol der s i n connect i on wi t h such sal e or exchange) .

2 C. Any of f er , sal e or i ssuance of secur i t i es t o any

3 cor por at i on, bank, savi ngs bank, savi ngs i nst i t ut i on, savi ngs

4 and l oan as soc i at i on, t r us t company, i ns ur anc e c ompany,

5 bui l di ng and l oan as s oc i at i on, or deal er ; t o a pens i on f und,

6 pensi on t r ust , or empl oyees' pr of i t shar i ng t r ust , ot her

7 f i nanci al i nst i t ut i on or i nst i t ut i onal i nvest or , any

8 gover nment or pol i t i cal s ubdi vi s i on or i ns t r ument al i t y

9 t her e of , whet her t he pur c has er i s ac t i ng f or i t s el f or i n s ome

10 f i duci ar y capaci t y; t o any par t ner s hi p or ot her as soci at i on

11 engaged as a s ubs t ant i al par t of i t s bus i nes s or oper at i ons i n

12 pur chas i ng or hol di ng s ecur i t i es ; t o any t r us t i n r e spec t of

13 whi ch a bank or t r us t company i s t r us t ee or co- t r us t ee; t o any

14 ent i t y i n whi ch at


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1 t he empl oyees of , any st at e or pol i t i cal subdi vi si on or agency

2 or i nst r ument al i t y t her eof i f s uch pl an has t ot al ass et s i n

3 exces s of $5, 000, 000; or t o any or gani z at i on des cr i bed i n

4 Sect i on 501 ( c ) ( 3) of t he I nt er nal Revenue Code of 1986, any

5 Massachuset t s or si mi l ar busi ness t r ust , or any par t ner shi p, i f

6 s uch or gani z at i on, t r us t , or par t ner s hi p has t ot al as set s i n

7 excess of $5, 000, 000.

8 D. The Secr et ar y of St at e i s gr ant ed aut hor i t y t o cr eat e by

9 r ul e or r egul at i on a l i mi t ed of f er i ng t r ans ac t i onal exempt i on

10 t hat f ur t her s t he obj ect i ves of compat i bi l i t y wi t h f eder al

11 exempt i ons and uni f or mi t y among t he st at es. The Secretary of

12 St at e s hal l pr e sc r i be by r ul e or r e gul at i on t he amount of t he

13 f ee f or f i l i ng any r epor t r equi r e d under t hi s s ubs ect i on, but

14 t he f ee shal l not be l ess t han t he mi ni mum amount nor mor e t han

15 t he maxi mum amount est abl i shed under Sect i on l l a of t hi s Act

16 and shal l not be r et ur nabl e i n any event .

17 E. Any of f er or sal e of secur i t i es by an execut or ,

18 admi ni s t r at or , guar di an, r ec ei ver or t r us t ee i n i ns ol venc y or

19 bankr upt cy, or at any j udi ci al s al e, or at a publ i c s al e by

20 auct i on hel d at an adver t i s ed t i me and pl ac e, or t he of f er or

21 s al e of secur i t i es i n good f ai t h and not f or t he pur pos e of

22 avoi di ng t he pr ovi s i ons of t hi s Ac t by a pl edgee of s ec ur i t i es

23 pl edged f or a bona f i de debt .

24 F. Any of f er or sal e by a r egi st er ed deal er , ei t her as

25 pr i nci pal or agent , of any s ecur i t i es ( except f ace amount

26 cer t i f i cat e c ont r a ct s and i nves t ment f und s har es ) at a pr i ce


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1 r easonabl y r el at ed t o t he cur r ent mar ket pr i ce of such

2 s ecur i t i es , pr ovi ded:

3 ( 1) ( a) t he secur i t i es ar e i ssued and out s t andi ng;

4 ( b) t he i ssuer i s r equi r ed t o f i l e r epor t s pur suant

5 t o Sect i on 13 or Sect i on l 5( d) of t he Feder al 1934 Act

6 and has been subj ect t o s uch r equi r ement s dur i ng t he 90

7 day per i od i mmedi at el y pr ecedi ng t he dat e of t he of f er

8 or sal e, or i s an i ssuer of a secur i t y cover ed by

9 Sect i on 12 ( g) ( 2) ( B) or ( G) of t he Feder al 1934 Act ;

10 ( c) t he deal er has a r easonabl e basi s f or bel i evi ng

11 t hat t he i ssuer i s cur r ent i n f i l i ng t he r epor t s

12 r equi r ed t o be f i l ed at r egul ar i nt er val s pur suant t o

13 t he pr ovi si ons of Sect i on 13 or Sect i on l 5( d) , as t he

14 case may be, of t he Feder al 1934 Act , or i n t he case of

15 i ns ur ance compani es exempt ed f r om Sect i on l 2( g) of t he

16 Feder al 1934 Act by s ubpar agr aph 12 ( g) ( 2) ( G) t her eof ,

17 t he annual st at ement r ef er r ed t o i n Sect i on

18 12 ( g) ( 2) ( G) ( i ) of t he Feder al 1934 Act ; and

19 ( d) t he deal er has i n i t s r ecor ds, and makes

20 r easonabl y avai l abl e upon r equest t o any per son

21 expr essi ng an i nt er est i n a pr oposed t r ansact i on i n t he

22 secur i t i es, t he i ssuer ' s most r ecent annual r epor t

23 f i l ed pur suant t o Sect i on 13 or l 5( d) , as t he case may

24 be, of t he Feder al 1934 Act or t he annual st at ement i n

25 t he cas e of an i ns ur ance company exempt ed f r om Sect i on

26 12 ( g) of t he Feder al 1934 Act by s ubpar agr aph


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1

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12( g) ( 2) ( G) t her eof , t oget her wi t h any ot her r epor t s

r equi r ed t o be f i l ed at r egul ar i nt er val s under t he

Feder a l 1934 Ac t by t he i s s uer af t er s uc h annual r e por t

4 or annual st at ement ; pr ovi ded t hat t he maki ng

s ubpar agr aph, unl es s ot her wi s e r epr es ent ed, s hal l not

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avai l abl e of such r epor t s pur suant t o t hi s

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const i t ut e a r epr esent at i on by t he deal er t hat t he

i nf or mat i on i s t r ue and cor r ect , but s hal l c ons t i t ut e a

r epr es ent at i on b~ t he deal er t hat t he i nf or mat i on i s

r eas onabl y cur r ent ; or

( 2) ( a) pr i or t o any of f er or sal e, an appl i cat i on f or

t he aut hor i zat i on t her eof and a r epor t as set f or t h

under s ubpar agr a ph ( d) of t hi s par a gr a ph ( 2) has been

f i l ed by any r egi s t er ed deal er wi t h and appr oved by t he

Secr et ar y of St at e pur suant t o such r ul es and

r egul at i ons as t he Secr et ar y of St at e may pr es cr i be;,

( b) t he Sec r et ar y of St at e s hal l have t he power by

or der t o r ef us e t o appr ove any appl i cat i on or r epor t

f i l ed pur s uant t o t hi s par agr aph ( 2) i f

( i ) t he appl i c at i on or r epor t does not c ompl y

wi t h t he pr o vi s i ons of t hi s par a gr aph ( 2) , ' or

( i i ) t he of f er or s al e of s uch s ecur i t i es woul d

wor k or t end t o wor k a f r aud or decei t , or

( i i i ) t he i s suer or t he appl i c ant has vi ol at ed

any of t he pr o vi s i ons of t hi s Act ;

( c) each appl i cat i on and r epor t f i l ed pur s uant t o


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t hi s par a gr aph ( 2) s hal l be ac compani ed by a f i l i ng f ee

and an exami nat i on f ee i n t he amount es t abl i s hed

pur s uant t o Sec t i on 11a of t hi s Ac t , whi c h s hal l not be

r et ur nabl e i n any event ;

( d) t her e shal l be submi t t ed t o t he Secr et ar y of

St at e no l at er t han 120 days f ol l owi ng t he end of t he

i s suer ' s f i s cal year , each year dur i ng t he per i od of

t he aut hor i z at i on, one copy of a r epor t whi ch s hal l

cont ai n a bal ance sheet and i ncome st at ement pr epar ed

as of t he i ssuer ' s most r ecent f i scal year end

cer t i f i ed by an i ndependent cer t i f i ed publ i c

account ant , t oget her wi t h s uc h c ur r ent i nf or mat i on

c onc er ni ng t he s ec ur i t i es and t he i s suer t her e of as t he

Sec r et ar y of St at e may pr e sc r i be by r ul e or r e gul at i on

or order;

( e) pr i or t o any of f er or s al e of s ecur i t i es under

t he pr o vi s i ons of t hi s par agr aph ( 2) , eac h r egi s t er ed

deal er par t i ci pat i ng i n t he of f er or sal e of such

s ec ur i t i es s hal l pr ovi de upon r e ques t of pr os pec t i ve

pur c has er s of s uc h s ec ur i t i es a c opy of t he mos t r e cent

r epor t r equi r e d under t he pr ovi s i ons of s ubpar a gr a ph

( d) o f t hi s par agr aph ( 2) ;

( f ) appr oval of an appl i cat i on f i l ed pur s uant t o

t hi s par a gr a ph ( 2) of s ubs ec t i on F s hal l expi r e 5 year s

af t er t he dat e of t he gr ant i ng of t he appr o val , unl es s

s ai d appr oval i s s ooner t er mi nat ed by ( 1) s us pens i on or


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r evocat i on by t he Secr et ar y of St at e i n t he s ame manner

as i s pr ovi ded f or i n s ubs ect i ons E, F and G of Sect i on

11 of t hi s Act , or ( 2) t he appl i cant f i l i ng wi t h t he

Secr et ar y of St at e an af f i davi t t o t he ef f ect t hat ( i )

t he s ubj ect s ecur i t i es have become exempt under

Sect i on 3 of t hi s Act or ( i i ) t he appl i cant no l onger

i s capabl e of ac t i ng as t he appl i cant and s t at i ng t he

r easons t her ef or or ( i i i ) t he appl i cant no l onger

desi r es t o act as t he appl i cant . I n t he event of t he

f i l i ng of an af f i davi t under ei t her pr ecedi ng

s ubdi vi s i on ( i i ) or ( i i i ) t he Secr et ar y of St at e may

aut hor i z e a s ubs t i t ut i on of appl i cant upon t he new

appl i c ant execut i ng t he appl i c at i on as or i gi nal l y

f i l ed. However , t he af or ement i oned subst i t ut ed

execut i on s hal l have no ef f ect upon t he pr evi ous l y

det er mi ned dat e of expi r at i on of appr oval of t he

appl i c at i on. Not wi t hs t andi ng t he pr ovi s i ons of t hi s

subpar agr aph ( f ) , appr oval s gr ant ed under t hi s

par agr aph ( 2) of s ubsect i on F pr i or t o t he ef f ect i ve

dat e of t hi s Ac t s hal l be gover ned by t he pr o vi s i ons of

t hi s Ac t i n ef f ect on s uch dat e of appr oval ; and

( g) no per s on s hal l be c ons i der e d t o have vi ol at ed

Sect i on 5 of t hi s Act by r eason of any of f er or sal e

ef f ect ed i n r el i ance upon an appr oval gr ant ed under

t hi s par agr aph ( 2) af t er a t er mi nat i on t her eof under

t he f or egoi ng subpar agr aph ( f ) i f of f i ci al not i ce of


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1 such t er mi nat i on has not been ci r cul at ed gener al l y t o

2 deal er s by t he Secr et ar y of St at e and i f s uch per son

3 sust ai ns t he bur den of pr oof t hat he or s he di d not

4 know, and i n t he exer c i se of r easonabl e car e, coul d not

5 have known, of t he t er mi nat i on; or

6 ( 3) t he secur i t i es, or secur i t i es of t he same cl ass,

7 ar e t he subj ect of an exi s t i ng r egi s t r at i on under Sect i on 5

8 of t hi s Act .

9 The exempt i on pr ovi ded i n t hi s s ubs ect i on F s hal l appl y

10 onl y i f t he of f er or s al e i s made i n good f ai t h and not f or t he

11 pur pose of avoi di ng any of t he pr ovi si ons of t hi s Act , and onl y

12 i f t he of f er or sal e i s not made f or t he di r ect or i ndi r ect

13 benef i t of t he i ss uer of t he secur i t i es , or t he cont r ol l i ng

14 per s on i n r es pec t of s uc h i s suer .

15 G. ( 1) Any of f er , sal e or i ssuance of a secur i t y, whet her

16 t o r es i dent s or t o non- r esi dent s of t hi s St at e, wher e:

17 ( a) al l s al es of such secur i t y t o r esi dent s of t hi s

18 St at e ( i ncl udi ng t he most r ecent such sal e) wi t hi n t he

19 i mmedi at el y pr ecedi ng 12- mont h per i od have been made

20 t o not mor e t han 35 per sons or have i nvol ved an

21 aggr egat e sal es pr i ce of not mor e t han $1, 000, 000;

22 ( b) such secur i t y i s not of f er ed or sol d by means

23 of any gener al adver t i si ng or gener al sol i ci t at i on i n

24 t hi s St at e; and

25 ( c) no commi ssi on, di scount , or ot her r emuner at i on

26 exceedi ng 20% of t he sal e pr i ce of such secur i t y, i f


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sol d t o a r esi dent of t hi s St at e, i s pai d or gi ven

di r ect l y or i ndi r ect l y f or or on acc ount of s uch s al es .

( 2) I n comput i ng t he number of r es i dent pur chas er s or

t he aggr egat e s al es pr i ce under par agr aph ( 1) ( a) above,

t her e s hal l be exc l uded any pur c has er or dol l ar amount of

sal es pr i ce, as t he case may be, wi t h r espect t o any

s ecur i t y whi ch at t he t i me of i t s s al e was exempt under

Sect i on 3 or was r egi s t er ed under Sect i on 5, 6 or 7 or was

s ol d i n a t r ans act i on exempt under ot her s ubs ec t i ons of

t hi s Sec t i on 4.

( 3) A pr ospect us or pr el i mi nar y pr ospect us wi t h

r es pec t t o a s ecur i t y f or whi ch a r egi s t r at i on s t at ement i s

pendi ng or ef f ect i ve under t he Feder al 1933 Act s hal l not

be deemed t o cons t i t ut e gener al adver t i s i ng or gener al

sol i ci t at i on i n t hi s St at e as such t er ms ar e used i n

par agr aph ( 1) ( b) above, pr ovi ded t hat s uch pr os pect us or

pr el i mi nar y pr os pect us has not been s ent or ot her wi s e

del i ver e d t o mor e t han 150 r e si dent s of t hi s St at e.

( 4) The Secr et ar y of St at e s hal l by r ul e or r egul at i on

r equi r e t he f i l i ng of a r epor t or r epor t s of s al es made i n

r el i ance upon t he exempt i on pr ovi ded by t hi s s ubs ecti on G

and pr es cr i be t he f or m o f s uch r epor t and t he t i me wi t hi n

whi ch s uch r epor t s hal l be f i l ed. Such r epor t shal l s et

f or t h t he name and addr ess of t he i ssuer and of t he

cont r ol l i ng per son, i f t he sal e was f or t he di r ect or

i ndi r ect benef i t of s uch per s on, and any ot her i nf or mat i on


14/48

- 13 - L RB098 22997 K TG 61957 b

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

deemed necess ar y by t he Secr et ar y of St at e t o enf or ce

c ompl i anc e wi t h t hi s s ubs ec t i on G. The Sec r et ar y of St at e

s hal l pr es cr i be by r ul e or r e gul at i on t he amount of t he f ee

f or f i l i ng any s uc h r epor t , es t a bl i s hed pur s uant t o Sec t i on

l l a of t hi s Act , whi ch shal l not be r et ur nabl e i n any

event . The Sec r et ar y of St at e may i mpos e, i n s uc h c as es as

he or s he may deem appr opr i at e, a penal t y f or f ai l ur e t o

f i l e any such r epor t i n a t i mel y manner , but no such

penal t y s hal l exceed an amount equal t o f i ve t i mes t he

f i l i ng f ee. The cont ent s of any such r epor t or por t i on

t her eof may be deemed c onf i dent i al by t he Secr et ar y of

St at e by r ul e or or der and i f so deemed shal l not be

di scl osed t o t he publ i c except by or der of cour t or i n

cour t pr oceedi ngs. The f ai l ur e t o f i l e any such r epor t

s hal l not af f ec t t he avai l abi l i t y of s uc h exempt i on, but

such f ai l ur e t o f i l e any such r epor t shal l const i t ut e a

vi ol at i on of subsect i on D of Sect i on 12 of t hi s Act ,

s ubj ec t t o t he penal t i es enumer a t ed i n Sec t i on 14 of t hi s

Act . The ci vi l r emedi es pr ovi ded f or i n s ubs ect i on A of

Sec t i on 13 of t hi s Ac t and t he c i vi l r emedi es of r e sc i s si on

and appoi nt ment of a r ecei ver , cons er vat or , anci l l ar y

r ecei ver or anci l l ar y conser vat or pr ovi ded f or i n

subsect i on F of Sect i on 13 of t hi s Act shal l not be

avai l abl e agai ns t any per s on by r eas on of t he f ai l ur e t o

f i l e any s uch r epor t or on account of t he cont ent s of any

s uch r epor t .


15/48

- 14 - L RB098 22997 K TG 61957 b

1 H. Any of f er , sal e or i ssuance of a secur i t y t o an

2 accredi t ed i nvest or , whet her made t hr ough a gua1i f i ed I nt er net

3 por t al or ot her wi se, i f no commi ssi on or ot her r emuner at i on i s

4 pai d or gi ven di r ec t l y or i ndi r ec t l y f or s ol i c i t i ng any per s on

5 i n t hi s St at e, exc ept t o br oker - deal er s and agent s l i c ens ed i n

6 this State. (1) afl} flatt1:E'al ~eyseF1 ahe 1=103, sr is reasoflolel)i

7 1ge1ie 0 eel 19) EflC ]9crsofl relyiA~ l:1f:30fl t19:i9 sl:ll9seetioR II to fiave,

8 a fleE 011 OF ) siAt Act YiO:E'th lEft tfiat 19CFson! 3 S130l:1SC, at

9 t19:e tiffiC of 1 : : 1 9 : 0 offer, sale OF iS3l:10flCC, iF! CHOESS of

10 ~1,080, 000 eHell:lelifl~ thE oall:lc of a fl:E'iflci]gel ycsiei:cnce, Of? (2)

11 3 R) fl ott lr al 1 9cr sof l h e he el , OF is 008019:0191) 1 g e1 i co c el 1 9 ) th E

1 2 ,crsoR r el yi R~ l:1f:30Rt h i s stl19scetion I I t o l = la J c fieel, aA iRCOffiC OF

13 ~ eiRE iAC6ffiC -,,tiER 1::19:01::19CfS8fl' 3 Sf:38l:lSC, in CHCCS3 sf ~2GO, 800

14 1ft 608ft sf the 1::;18 FRest rEccAE loafS aRa fie fcas8flalely

15 CH}?Cets, or is reasoRo191) CHI3Ceteel to have, DR iflcsmc if} CJrCC03

16 sf $200,000 if } the Cl:1FFCRt )cay, BY (3) aft) ~CYSeR that is flet

17 a f ta t l: 1 Fa l I 3 CF S Bf t a Re l i f t .dRieR at least 90% sf ERe eEjl:1it)

18 iRtcFest is s. i Re~~) ~eFsef l s h e m e et e it 1= .t eFs f t hc E es ts s et

19 f S Ft h i f t e l at l se s (1 ) S F (2 ) s f t h is s t lb s ce t is f i [ 1 , I 3 Fe o ie l cd tRat

20 StieR oee~Fi t y i o flet effcrce SF oel e ey ffieafl9sf aR Y ~eRcFal

21 ael oeFt i si R~S F ~eRcf al s sli ei tat is R iR th is S tat e.

22 I . Any of f er , sal e or i ssuance of secur i t i es t o or f or t he

23 benef i t of s ec ur i t y hol der s of any per s on i nc i dent t o a vot e by

24 such secur i t y hol der s pur suant t o such per son' s or gani zat i onal

25 document or any appl i cabl e st at ut e of t he j ur i sdi ct i on of such

26 per son' s or gani zat i on, on a mer ger , consol i dat i on,


16/48

- 15 - L RB098 22997 KT G 61957 b

1 r ecl as si f i cat i on of s ecur i t i es , or s al e or t r ans f er of as set s

2 i n cons i der at i on of or exc hange f or s ec ur i t i es of t he s ame or

3 anot her per s on.

4 J. Any of f er , s al e or i s s uanc e of s ec ur i t i es i n exc hange

5 f or one or mor e out s t andi ng s ecur i t i es , cl ai ms or pr oper t y

6 i nt er es t s , or par t l y i n s uch exchange and par t l y f or cas h,

7 wher e such of f er , sal e or i ssuance i s i nci dent t o a

8 r eor gani zat i on, r ecapi t al i zat i on, r eadj ust ment , composi t i on or

9 s et t l ement of a cl ai m, as appr oved by a c our t of c ompet ent

10 j ur i s di c t i on of t he Uni t ed St at es , or any s t at e.

11 K. Any of f er , s al e or i s suance of s ecur i t i es f or pat r onage,

12 or as pat r onage r ef unds , or i n connect i on wi t h mar k et i ng

13 agr eement s by cooper at i ve associ at i ons or gani zed excl usi vel y

14 f or agr i cul t ur al , pr oducer , mar ket i ng, pur chasi ng, or consumer

15 pur pos es ; and t he s al e of s ubs cr i pt i ons f or or s har e s o f s t oc k

16 of cooper at i ve associ at i ons or gani zed excl usi vel y f or

17 agr i c ul t ur al , pr oduc er , mar ket i ng, pur c has i ng, or c ons umer

18 pur pos es , i f no c ommi s s i on or ot her r emuner at i on i s pai d or

19 gi ven di r ect l y or i ndi r ect l y f or or on account of such

20 s ubs cr i pt i on, s al e or r es al e, and i f any per s on does not own

21 benef i ci al l y mor e t han 5% of t he aggr egat e amount of i ssued and

22 out st andi ng capi t al st ock of such cooper at i ve associ at i on.

23 L. Of f er s f or sal e or sol i ci t at i ons of of f er s t o buy ( but

24 not t he accept ance t her eof ) , of secur i t i es whi ch ar e t he

25 s ubj ec t of a pendi ng r e gi s t r at i on s t at ement f i l ed under t he

26 Feder al 1933 Act and whi ch ar e t he s ubj ect of a pendi ng


17/48

- 16 - LRB098 22997 KTG 61957 b

1 appl i c at i on f or r egi s t r at i on under t hi s Act .

2 M. Any of f er or s al e of pr eor gani zat i on s ubs cr i pt i ons f or

3 any s ecur i t i es pr i or t o t he i ncor por at i on, or gani z at i on or

4 f or mat i on of any i s s uer under t he l aws of t he Uni t ed St at es , or

5 any st at e, or t he i ssuance by such i ssuer , af t er i t s

6 i ncor por at i on, or gani z at i on or f or mat i on, of secur i t i es

7 pur s uant t o s uc h pr eor gani z at i on s ubs cr i pt i ons , pr ovi ded t he

8 number of s ubs cr i ber s does not exceed 25 and ei t her ( 1) no

9 commi ssi on or ot her r emuner at i on i s pai d or gi ven di r ect l y or

10 i ndi r ec t l y f or or on ac count of s uc h s al e or s al es or i s s uanc e,

11 or ( 2) i f any commi ssi on or ot her r emuner at i on i s pai d or gi ven

12 di r ec t l y or i ndi r ec t l y f or or on acc ount of s uc h s al e or s al es

13 or i s suance, t he secur i t i es ar e not of f er ed or s ol d by any

14 means of gener al adver t i s i ng or gener al s ol i c i t at i on i n t hi s

15 St at e.

16 N. The execut i on of or der s f or pur c has e of s ecur i t i es by a

17 r egi st er ed sal esper son and deal er , pr ovi ded such per sons act as

18 agent f or t he pur chaser , have made no sol i ci t at i on of t he or der

19 t o pur c has e t he s ec ur i t i es , have no di r ect i nt er e st i n t he s al e

20 or di st r i but i on of t he secur i t i es or der ed, r ecei ve no

21 commi s si on, pr of i t , or ot her compens at i on ot her t han t he

22 commi ssi ons i nvol ved i n t he pur chase and sal e of t he secur i t i es

23 and del i ver t o t he pur c has er wr i t t en c onf i r mat i on of t he or der

24 whi ch cl ear l y i dent i f i es t he commi ssi ons pai d t o t he r egi st er ed

25 deal er .

26 O. Any of f er , sal e or i ssuance of secur i t i es, ot her t han


18/48

- 17 - LRB098 22997 KTG 61957 b

1 f r act i onal undi vi ded i nt er est s i n an oi l , gas or ot her mi ner al

2 l eas e, r i ght or r oyal t y, f or t he di r ect or i ndi r ect benef i t of

3 t he i s s uer t her eof , or of a cont r ol l i ng per s on, whet her t hr ough

4 a deal er ( ac t i ng ei t her as pr i nc i pal or agent ) or ot her wi s e, i f

5 t he secur i t i es sol d, i mmedi at el y f ol l owi ng ' t he sal e or sal es,

6 t oget her wi t h secur i t i es al r eady owned by t he pur chaser , woul d

7 cons t i t ut e 50% or mor e of t he equi t y i nt er est of anyone

8 i ssuer , pr ovi ded t hat t he number of pur chaser s i s not mor e t han

9 5 a nd pr ovi ded f ur t her t hat no c ommi s s i on, di s count or ot her

10 r emuner at i on exceedi ng 15% of t he aggr egat e sal e pr i ce of t he

11 s ecur i t i es i s pai d or gi ven di r ect l y or i ndi r ect l y f or or on

12 acc ount of t he s al e or s al es .

13 P. Any of f er , sal e or i ssuance of secur i t i es ( except f ace

14 amount cer t i f i cat e cont r act s and i nves t ment f und s har es )

15 i s s ued by and r epr es ent i ng an i nt er es t i n an i s s uer whi c h i s a

16 busi ness cor por at i on i ncor por at ed under t he l aws of t hi s St at e,

17 t he pur pos es of whi c h ar e t o pr ovi de c api t al and s uper vi s i on

18 sol el y f or t he r edevel opment of bl i ght ed ur ban ar eas l ocat ed i n

19 a muni ci pal i t y i n t hi s St at e and whos e as set s ar e l ocat ed

20 ent i r el y wi t hi n t hat muni ci pal i t y, pr ovi ded: ( 1) no

21 commi ssi on, di scount or ot her r emuner at i on i s pai d or gi ven

22 di r ect l y or i ndi r ect l y f or or on account of t he s al e or s al es

23 of s uc h s ec ur i t i es ; ( 2) t he a ggr egat e amount of any s ec ur i t i es

24 of t he i ssuer owned of r ecor d or benef i ci al l y by anyone per son

25 wi l l not exceed t he l es ser of $5, 000 or 4% of t he equi t y

26 c api t al i z at i on of t he i s suer ; ( 3) t he of f i cer s and di r e ct or s of


19/48

- 18 - LRB098 22997 KTG 61957 b

1 t he cor por at i on have been bona f i de r esi dent s of t he

2 muni ci pal i t y not l ess t han 3 year s i mmedi at el y pr ecedi ng t he

3 ef f ect i venes s of t he of f er i ng s heet f or t he s ecur i t i es under

4 t hi s s ubs ect i on P; and ( 4) t he i s suer f i l es wi t h t he Secr et ar y

5 of St at e an of f er i ng sheet descr i pt i ve of t he secur i t i es

6 set t i ng f or t h:

7 ( a) t he name and addr ess of t he i ssuer ;

8 ( b) t he t i t l e and t ot al amount of secur i t i es t o be

9 of f er ed;

10 ( c) t he pr i ce at whi ch t he secur i t i es ar e t o be

11 of f er ed; and

12 ( d) such addi t i onal i nf or mat i on as t he Secr et ar y of

13 St at e may pr es cr i be by r ul e and r egul at i on.

14 The Secr et ar y of St at e shal l wi t hi n a r easonabl e t i me

15 exami ne t he of f er i ng s heet s o f i l ed and, unl es s t he Sec r et ar y

16 of St at e s hal l make a det er mi nat i on t hat t he of f er i ng s heet s o

17 f i l ed does not c onf or m t o t he r equi r ement s of t hi s s ubs ec t i on

18 P, shal l decl ar e t he of f er i ng s heet t o be ef f ect i ve, whi ch

19 of f er i ng sheet shal l cont i nue ef f ect i ve f or a per i od of 12

20 mont hs f r om t he dat e i t becomes ef f ect i ve. The f ee f or

21 exami ni ng t he of f er i ng sheet shal l be as est abl i shed pur suant

22 t o Sec t i on 11a of t hi s Ac t , and s hal l not be r e t ur nabl e i n any

23 event . The Secr et ar y of St at e shal l by r ul e or r egul at i on

24 r equi r e t he f i l i ng of a r epor t or r epor t s of sal es made t o

25 r esi dent s of t hi s St at e i n r el i ance upon t he exempt i on pr ovi ded

26 by t hi s s ubs ec t i on P and pr es cr i be t he f or m of s uch r epor t and


20/48

- 19 - LRB098 22997 KTG 61957 b

1 t he t i me wi t hi n whi ch such r epor t shal l be f i l ed. The Secr et ar y

2 of St at e s hal l pr es cr i be by r ul e or r e gul at i on t he amount of

3 t he f ee f or f i l i ng any s uch r epor t , but s uch f ee s hal l not be

4 l ess t han t he mi ni mum amount nor mor e t han t he maxi mum amount

5 es t abl i s hed pur s uant t o Sec t i on l l a of t hi s Act , and s hal l not

6 be r et ur nabl e i n any event . The Secret ar y of St at e may i mpose,

7 i n s uc h c as es as he or s he may deem appr opr i at e, a penal t y f or

8 f ai l ur e t o f i l e any s uc h r epor t i n a t i mel y manner , but no s uc h

9 penal t y s hal l exc eed an amount equal t o f i ve t i mes t he f i l i ng

10 f ee. The cont ent s of any such r epor t shal l be deemed

11 conf i dent i al and shal l not be di scl osed t o t he publ i c except by

12 or der of cour t or i n cour t pr oc eedi ngs . The f ai l ur e t o f i l e any

13 such r epor t shal l not af f ect t he avai l abi l i t y of such

14 exempt i on, but such f ai l ur e t o f i l e any such r epor t s hal l

15 cons t i t ut e a vi ol at i on of s ubs ect i on D of Sect i on 12 of t hi s

16 Ac t , s ubj ec t t o t he penal t i es enumer at ed i n Sec t i on 14 of t hi s

17 Act . The ci vi l r emedi es pr ovi ded f or i n subsect i on A of Sect i on

18 13 of t hi s Act and t he ci vi l r emedi es of r esci ssi on and

19 appoi nt ment of a r ec ei ver , c ons er vat or , anc i l l ar y r ec ei ver or

20 anc i l l ar y c ons er vat or pr ovi ded f or i n s ubs ec t i on F of Sec t i on

21 13 of t hi s Ac t s hal l not be avai l abl e agai ns t any per s on by

22 r eas on of t he f ai l ur e t o f i l e any s uch r epor t or on account of

23 t he cont ent s of any s uch r epor t .

24 Q. Any i s ol at ed t r ans act i on, whet her ef f ect ed by a deal er

25 or not .

26 R. Any of f er , sal e or i ssuance of a secur i t y t o any per s on


21/48

- 20 - LRB098 22997 KTG 61957 b

1 who pur c has es at l east $150, 000 of t he s ecur i t i es bei ng

2 of f er ed, wher e t he pur c has er ' s t ot al pur c has e pr i ce does not ,

3 or i t i s r e as onabl y bel i eved by t he per s on r e l yi ng upon t hi s

4 s ubs ect i on R t hat s ai d pur c hase pr i ce does not , exceed 20

5 per c ent of t he pur c has er ' s net wor t h a t t he t i me of s al e, or i f

6 a nat ur al per s on a j oi nt net wor t h wi t h t hat per s on' s s pous e,

7 f or one or any c ombi nat i on of t he f ol l owi ng: (i) cash, (ii)

8 secur i t i es f or whi ch mar ket quot at i ons ar e r eadi l y avai l abl e,

9 ( i i i ) an unc ondi t i onal obl i gat i on t o pay c as h or s ec ur i t i es f or

10 whi ch quot at i ons ar e r eadi l y avai l abl e, whi ch obl i gat i on i s t o

11 be di s char ged wi t hi n f i ve year s of t he s al e of t he s ecur i t i es

12 t o t he pur c has er , or ( i v) t he c anc el l at i on of any i ndebt ednes s

13 owed by t he i ssuer t o t he pur chaser ; pr ovi ded t hat such

14 secur i t y i s not of f er ed or sol d by means of any gener alr

15 adver t i s i ng or gener al s ol i c i t at i on i n t hi s St at e.

16 S. Any o f f er , s al e or i s s uanc e of a s ec ur i t y t o any per s on

17 who i s , or who i s r eas onabl y bel i eved by t he per s on r el yi ng

18 upon t hi s s ubs ec t i on S t o be, a di r e ct or , exec ut i ve of f i cer , or

19 gener al par t ner of t he i s suer of t he s ecur i t i es bei ng of f er ed

20 or s ol d, or any di r e ct or , exec ut i ve of f i c er , or gener al par t ner

21 of a gener al par t ner of t hat i ssuer . For pur poses of t hi s

22 subsect i on S, "execut i ve of f i cer " shal l mean t he pr esi dent , any

23 vi ce pr esi dent i n char ge of a pr i nci pal busi ness uni t , di vi si on

24 or f unct i on ( s uch as s al es , admi ni s t r at i on or f i nance) , any

25 ot her of f i c er who per f or ms a pol i c y maki ng f unct i on, or any

26 ot her per son who per f or ms si mi l ar pol i cy maki ng f unct i ons f or


22/48

- 21 - LRB098 22997 KTG 61957 b

1 t he i ssuer . Exec ut i ve of f i c er s of subsi di ar i es may be deemed

2 execut i ve of f i cer s of t he i s suer i f t hey per f or m s uch pol i cy

3 maki ng f unc t i ons f or t he i s s uer .

4 A document bei ng f i l ed pur s uant t o t hi s Sect i on 4 s hal l be

5 deemed f i l ed, and any f ee pai d pur suant t o t hi s Sect i on 4 shal l

6 be deemed pai d, upon t he dat e o f ac t ual r ec ei pt t her eof by t he

7 Secr et ar y of St at e.

8 T. An of f er or sal e of a s ecur i t y by an i ssuer _ t hat i s

9 or gani zed and, as of t he t i me of t he of f er or s al e, i n good

10 st andi ng under t he l aws of t he State of I l l i noi s, pr ovi ded:

11 ( 1) The of f er i ng meet s al l of t he r egui r ement s of t he

12 f eder al exempt i on f or i nt r ast at e of f er i ngs pr ovi ded i n

13 Sect i on 3( a) ( 11) of t he Secur i t i es Act of 1933 ( 15 U. S. C.

14 77c ( a) ( 11) ) and Rul e 147 adopt ed under t he Secur i t i es Act

15 of 1933 ( 17CFR230. l 47) .

16 ( 2) The aggr egat e pur c hase pr i ce of al l s ecur i t i es s ol d

17 by an i ssuer i n r el i ance on t he exempt i on under t hi s

18 s ubs ect i on, wi t hi n any 12 mont h per i od, does not exceed

19 $20, 000, 000; unl es s t he i s suer has been i n bus i nes s f or

20 mor e t han one f ul l c onsec ut i ve c al endar year per i od and has

21 made avai l abl e ( di r ect l y, or t hr ough a gual i f i ed I nt er net

22 por t al ) t o each pr os pect i ve pur c has er and t he Secr et ar y of

23 St at e, copi es of i t s most r ecent annual f i nanci al

24 s t at ement s whi ch have been audi t ed by an i ndependent

25 audi t or and cer t i f i ed by s uch audi t or , and by one or mor e

26 seni or of f i cer s of t he i s suer , as f ai r l y, compl et el y and


23/48

- 22 - LRB098 22997 KTG 61957 b

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

accur at el y pr esent i ng t he f i nanci al condi t i on of t he

i s suer , i n al l mat er i al r e spec t s , as of t he dat es i ndi c at ed

t her ei n. I n 2019 and ever y 5t h year t her eaf t er , t he

Secr et ar y of St at e s hal l cumul at i vel y adj us t t he dol l ar

l i mi t at i ons i n t hi s par agr aph ( 2) t o r ef l ect t he change i n

t he Consumer Pr i ce I ndex f or al l Ur ban Consumer s publ i shed

by t he Uni t ed St at es Depar t ment of L abor , Bur e au of L abor

St at i s t i c s, r o undi ng eac h dol l ar l i mi t at i on t o t he near e st

$500, 000.

( 3) The aggr egat e amount sol d by an i ssuer t o any

pur chaser ( ot her t han an accr edi t ed i nvest or or an

exper i enc ed i nves t o r ) i n an of f er i ng of s ec ur i t i es made i n

r el i anc e on t he exempt i on pr o vi ded i n t hi s s ubs ect i on,

wi t hi n any consecut i ve l 2- mont h per i od, does not exceed t he

gr eat er of $10, 000 or 10% of t he pur c has er ' s expect ed

annual i ncome i n t he year of s al e. Wi t h r es pect t o whet her

a pur chaser has, or has not , exceeded t he maxi mum pur chase

l i mi t at i on pr ovi ded i n t hi s par agr aph ( 3) dur i ng t he

appl i cabl e l 2- mont h per i od, an i s suer may r el y on t he

wr i t t en s el f - r epr es ent at i on of t he pur c has er , pr ovi ded

t hat t he i ssuer has no knowl edge, or ot her r eason t o

bel i eve, t hat s uch l i mi t at i on has been exceeded by t he

pur chaser .

Wi t h r espect t o sat i sf act i on of t he f or egoi ng, an

i ss uer may r el y on t he wr i t t en sel f - r epr esent at i on of a

pur c has er as t o whet her s uch pur c has er has , or has not ,


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exceeded s uch appl i cabl e maxi mum pur chas e l i mi t at i on

dur i ng t he appl i cabl e 12- mont h per i od, pr ovi ded t he i s s uer

has no knowl edge, or ot her r eas on t o bel i eve, t hat s uch

l i mi t at i on has been exceeded by t he pur chaser .

( 4) The i ssuer :

( a) est abl i shes a mi ni mum and a maxi mum amount of

s ecur i t i es t o be s ol d and a deadl i ne f or s el l i ng ( or

ot her wi se get t i ng commi t ment s f or t he pur chase of ) t he

est abl i shed mi ni mum amount of secur i t i es;

( b) cons pi cuous l y di s cl os es t he i nf or mat i on

r egui r ed pur suant t o subpar agr aph ( a) i n any agr eement

evi denci ng a pur c has er ' s s ubs cr i pt i on t o pur c has e

s ecur i t i es of t he i s suer and t hat t he pur c has er may

cancel s uch commi t ment at any t i me upon not i ce t o t he

i s suer and wi t hout penal t y, i f t he mi ni mum t ar get

of f er i ng amount i s not r ai s ed on or bef or e t he pr opos ed

deadl i ne; and

( c) ent er s i nt o an escr ow agr eement wi t h a

gual i f i ed escr owee pr ovi di ng t hat , at a mi ni mum:

( i ) al l f unds t o be r e cei ved i n c onnec t i on wi t h

t he pr opos ed of f er i ng s hal l be del i ver ed t o, and

hel d by, t he gual i f i ed es cr owee pur s uant t o t he

t er ms of t he escr ow agr eement ; and

( i i ) t he i s suer shal l not have acces s t o t he

es cr ow f unds, or any por t i on t her eof , unt i l t he

aggr egat e f unds r ecei ved by t he gual i f i ed escrowee


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( a) f i l es a not i ce wi t h t he Secr et ar y of St at e, i n

a wr i t t en or el ect r oni c f or m as pr escr i bed by t he

Secr et ar y of St at e ( whi ch f or m t he Secr et ar y of St at e

s hal l make avai l abl e on t he Secr et ar y . of St at e' s


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I nt er net webs i t e) " , whi ch s pec i f i es t hat t he i s suer

i nt ends t o make an of f er i ng of s ec ur i t i es i n r e l i anc e

on t he exempt i on pr ovi ded i n t hi s s ubs ect i on T and

whi ch i ncl udes t he names and addr es ses of : ( i ) t he

i s suer ; ( i i ) al l per s ons or gual i f i ed I nt er net por t al s

t hat wi l l s el l or of f er t o s el l t he s ecur i t y on behal f

of t he i s s uer ; and ( i i i ) t he gual i f i ed es cr owee engaged

t o es cr o w t he f unds f r o m t he s ubj ec t of f er i ng; f ur t her ,

f or s o l ong as t he of f er i ng r emai ns open, t he i s suer

shal l f i l e a new not i ce wi t h t he Secr et ar y of St at e

( wi t hout addi t i onal char ge, pr o vi ded s uc h not i c e i s

i dent i f i ed as an amendment t o a pr evi ous l y f i l ed

not i ce) i f any i nf or mat i on pr evi ous l y pr ovi ded has

changed or has s i nce become er r oneous , f al s e, or

mat er i al l y mi sl eadi ng;

( b) del i ver s , a f ul l y execut ed copy of t he es cr o w

agr eement r egui r ed pur s uant t o s ubpar agr aph ( c) of

par agr aph ( 4) ; f ur t her , f or s o l ong as t he of f er i ng

r emai ns open, t he i s s uer s hal l pr ompt l y del i ver t o t he

Secr et ar y of St at e a f ul l y execut ed copy of al l

amendment s t o t he escrow agr eement ; t he i nf or mat i on

pr o vi ded pur s uant t o t hi s s ubpar a gr aph ( b) s hal l not be

a publ i c r e cor d and s hal l not be avai l abl e f or publ i c

i nspect i on; and

( c ) pays t he not i f i c at i on f i l i ng f ee es t abl i s hed

under Sec t i on l l a of t hi s Ac t .


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The Secr et ar y of St at e shal l , wi t hi n a r easonabl e t i me,

exami ne t he mat er i al s f i l ed pur s uant t o t hi s par a gr aph ( 7)

and, unl es s t he Secr et ar y of St at e not i f i es t he i s suer ( or

t he gual i f i ed I nt er net por t al , t o t he ext ent us ed) , on or

bef or e t he i ni t i al commencement dat e of t he of f er i ng, of

hi s or her det er mi nat i on t hat anyone or mor e of t he f i l ed

mat er i al s f ai l s t o conf or m t o t he r egui r ement s of t hi s

subs ect i on T, t he pr oposed of f er i ng s hal l be deemed

per mi t t ed.

The Secr et ar y of St at e shal l pr escr i be by r ul e t he

amount of t he f ee f or f i l i ng t he not i ce r egui r ed i n

s ubpar agr aph ( a) , es t abl i s hed pur s uant t o Sect i on 11a of

t hi s Act , whi ch s hal l not be r et ur nabl e i n any event . The

Secr et ar y of St at e may i mpos e, i n s uch c as es as he or s he

may deem appr opr i at e, a penal t y f or f ai l ur e t o f i l e any

s uc h not i c e i n a t i mel y manner , but no s uc h penal t y s hal l

exceed an amount egual t o 5 t i mes t he f i l i ng f ee. The

cont ent s of any s uch not i ce or por t i on t her eof may be

deemed conf i dent i al by t he Secr et ar y of St at e by r ul e or

or der and i f s o deemed s hal l not be di s cl os ed t o t he publ i c

except by or der of cour t . or i n cour t pr oceedi ngs . The

f ai l ur e t o f i l e any such not i ce does not af f ect t he

avai l abi l i t y of s uc h exempt i on, but s uc h f ai l ur e t o f i l e

any s uc h r epor t cons t i t ut es a vi ol at i on of s ubs ect i on D of

Sect i on 12 of t hi s Ac t , s ubj ec t t o t he penal t i es i n Sect i on

14 of t hi s Ac t . The c i vi l r e medi es pr ovi ded i n s ubs ec t i on A


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of Sect i on 13 of t hi s Act and t he ci vi l r emedi es of

r es ci s si on and appoi nt ment of a r ecei ver , cons er v at or ,

anci l l ar y r ecei ver , or anci l l ar y cons er v at or pr o vi ded i n

s ubs ect i on F of Sect i on 13 of t hi s Act ar e not avai l abl e

agai ns t any per s on by r eason of t he f ai l ur e t o f i l e any

such r epor t or on account of t he cont ent s of any such

report.

( 8) The i ssuer pr ovi des a copy of t he escrow agr eement ,

t he di scl osur e document , and al l ot her document s or

i nf or mat i on t hen pr o vi ded t o t he Sec r et ar y of St at e under

subpar agr aph ( a) or ( b) of par agr aph ( 7) t o each

pr os pect i ve pur c has er at t he t i me t he of f er of s ecur i t i es

i s made. F ur t her , f or s o l ong as t he of f er i ng r emai ns open,

t he i s suer i s r egui r ed t o pr ompt l y pr o vi de a copy t o eac h

pr os pecti ve and compl et ed pur chas er of al l r epl acement s ,

modi f i cat i ons, at t achment s, updat es, or ot her i nf or mat i on.

pr o vi ded t o t he Sec r et ar y of St at e pur s uant t o s ubpar a gr a ph

( a) or ( b) of par agr aph ( 7) . An i ssuer may sat i sf y t he

r e por t i ng r egui r ement of t hi s par a gr a ph ( 8) by maki ng t he

i nf or mat i on avai l abl e, i n a pr i nt abl e f or mat , on i t s own

webs i t e or t hr ough a gual i f i ed I nt er net por t al pr ovi ded

such i nf or mat i on i s pr ompt l y made avai l abl e by t he i ssuer

and t he i s s uer pr ompt l y al er t s each pr os pecti ve pur chas er

or compl et ed pur chaser of t he avai l abi l i t y of t he

i nf or mat i on.

( 9) Al l payment s f or pur c has e of s ecur i t i es of f er ed


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pur s uant t o t he exempt i on pr ovi ded under t hi s s ubs ecti on T

ar e made di r e ct l y t o, and hel d by, t he gual i f i ed es cr owee

i dent i f i ed i n t he es cr ow agr eement r egui r ed pur s uant t o

subpar agr aph ( c) of par agr aph (4).

( 10) The i ssuer i ncl udes ( and, t o t he ext ent a

gual i f i ed I nt er net por t al i s us ed, t he gual i f i ed I nt er net

por t al i ncl udes ) t he f ol l owi ng l egend cons pi cuous l y on t he

cover page of any di scl osur e document del i ver ed t o a

pr os pecti ve pur chas er or t o whi ch a pr os pecti ve pur chas er

has been gr ant ed el ect r oni c access:

I N MAKI NG AN I NVESTMENT DECI SI ON, I NVESTORS MUST

RELY ON THEI R OWN EXAMI NATI ON OF THE I SSUER AND THE

TERMS OF THE OFFERI NG, I NCLUDI NG THE MERI TS AND RI SKS

I NVOLVED. THESE SECURI TI ES HAVE NOT BEEN RECOMMENDED

BY ANY FEDERAL OR STATE SECURI TI ES COMMI SSI ON OR

DI VI SI ON OR OTHER REGULATORY AUTHORI TY. FURTHERMORE,

THE FOREGOI NG AUTHORI TI ES HAVE NOT CONFI RMED THE

ACCURACY OR DETERMI NED THE ADEQUACY OF THI S DOCUMENT.

ANY REPRESENTATI ON TO THE CONTRARY I S A CRI MI NAL

OFFENSE. THESE SECURI TI ES ARE SUBJ ECT TO RESTRI CTI ONS

ON TRANSFERABI L I TY AND RESAL E AND MAY NOT BE

TRANSFERRED OR RESOLD EXCEPT AS PERMI TTED UNDER THE

SECURI TI ES ACT OF 1933, AS AMENDED, AND APPLI CABLE

STATE SECURI TI ES LAWS, OR PURSUANT TO REGI STRATI ON OR

EXEMPTI ON THEREFROM. I NVESTORS SHOULD BE AWARE THAT

THEY WI LL BE REQUI RED TO BEAR THE FI NANCI AL RI SKS OF


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THI S I NVESTMENT FOR AN I NDEFI NI TE PERI OD OF TI ME.

( 11) The i ssuer ( di r ect l y or t hr ough a qual i f i ed

I nt er net por t al ) r equi r es each pur chaser t o cer t i f y, i n

wr i t i ng or el ectr oni cal l y, as f ol l ows :

I UNDERSTAND AND ACKNOWLEDGE THAT:

I am a r e si dent of t he St at e of I l l i noi s .

I am i nvest i ng i n a hi gh- r i sk, specul at i ve

bus i nes s vent ur e. I may l os e al l of my i nves t ment and I

can af f or d t he l oss of my i nvest ment .

Thi s of f er i ng has not been r evi ewed or appr oved by

any St at e or f eder al s ecur i t i es commi s s i on or di vi s i on

or ot her r egul at or y aut hor i t y and no s uch per s on or

aut hor i t y has conf i r med t he accur acy or det er mi ned t he

adeguacy of any di s cl os ur e made t o me r el at i ng t o t hi s

of f er i ng.

The secur i t i es I am aCqui r i ng i n t hi s of f er i ng ar e

i l l i gui d, t her e i s no r eady mar k et f or t he s al e of s uch

s ec ur i t i es , i t may be di f f i c ul t or i mpos s i bl e f or me t o

s el l or ot her wi s e di s pos e of t hi s i nves t ment , and,

accor di ngl y, I may be r egui r ed t o hol d t hi s i nves t ment

i ndef i ni t el y.

I may be s ubj ec t t o t ax on my s har e of t he t axabl e

i ncome and l osses of t he company, whet her or not I have

sol d or ot her wi se di sposed of my i nvest ment or r ecei ved

any di vi dends or ot her di st r i but i ons f r om t he company.

. . . . . . . . ( Si gnat ur e)


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( 12) The i ssuer ( di r ect l y or t hr ough a gual i f i ed

I nt er net por t al ) obt ai ns f r o m eac h pur c has er of a s ec ur i t y

of f er ed under t hi s subsect i on T evi dence t hat t he pur chaser

i s a r esi dent of t hi s St at e and, i f appl i cabl e, i s an

exper i enced i nves t or or accr edi t ed i nves t or . Wi t hout

l i mi t i ng t he gener al i t y of t he f or egoi ng, and not t o t he

excl usi on of ot her r easonabl e met hods whi ch may be used by

t he i s s uer i n connecti on wi t h t he f or egoi ng, an i s s uer may

r el y:

( a) on a copy of a val i d dr i ver ' s l i cense ( or

t hi r d- par t y ver i f i cat i on bas ed on a pur c has er ' s val i d

12 dr i ver ' s l i cense i nf or mat i on) , or ver i f i cat i on

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( i ndependent l y or by a t hi r d- par t y) of t he st at e of

or i gi nat i on of t he pur c has er ' s I nt er net Pr ot ocol ( I P)

addr es s, f or pur pos es of es t a bl i s hi ng an i ndi vi dual

pur c has er ' s r esi dence, pr ovi ded t he i ssuer has no

knowl edge, or ot her r eason t o bel i eve, t hat t he

i ndi vi dual pur c has er i s not a r es i dent of t he St at e;

( b) on r epr esent at i ons si gned, i n wr i t i ng or

21 el ect r oni cal l y, by a pur chaser f or pur poses of

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es t abl i s hi ng s uch pur chas er ' s s t at us as an exper i enced

-i nves t o r and i dent i f yi ng eac h of t he r e gui r e ment s of

Sec t i on 2. 37 whi c h appl y t o s uc h pur c has er ( and, wi t h

r espect t o subsect i ons ( c l , ( d) , ( e) , or ( g) of Sect i on

2. 37, as appl i c abl e, a des cr i pt i on of t he appl i c abl e


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pr ovi ded

r eason t o

or may be,

l i c ens e, advanc ed degr ee, or j ob pos i t i on) ,

t he i ssuer has no knowl edge, or ot her

bel i eve, t hat s uch r epr es ent at i ons ar e,

f al s e i n whol e or i n par t ; and

( c) on r epr esent at i ons si gned, i n wr i t i ng or

el ect r oni cal l y, by a pur chaser f or pur poses of

es t a bl i s hi ng s uc h pur c has er ' s s t a t us as an ac cr e di t ed

i nves t or , pr ovi ded t he i s suer has no knowl edge, or

ot her r eas on t o bel i eve, t hat s uch r epr es ent at i ons

ar e, or may be, f al s e i n whol e or i n par t .

( 13) The i s suer ( and t o t he ext ent a gual i f i ed I nt er n et

por t al i s used, s uch gual i f i ed I nt er net por t al ) t akes

commer ci al l y r eas onabl e meas ur es t o l i mi t acces s t o any

i nf or mat i on c oncer ni ng t he of f er or s al e of t he s ubj ect

s ecur i t i es t o r es i dent s of t hi s St at e. Not wi t hs t andi ng t he

f or egoi ng, an i s suer i s per mi t t ed t o di s semi nat e ( and i s

not deemed i n vi ol at i on of t hi s par agr aph ( 13) f or

di s semi nat i ng) t hr ough a gual i f i ed I nt er net por t al or

ot her wi s e a gener al announcement r egar di ng t he i s s uer ' s

i nt ent t o make an of f er i n r el i ance on t he exempt i on under

t hi s s ubs ec t i on T, s o l ong as s uc h gener al announc ement

c ont ai ns a s t at ement maki ng i t c l ear t hat t he of f er i ng i s

di r ect ed onl y t o r esi dent s of t hi s St at e and t he

i nf or mat i on pr o vi ded i n s uch gener al announcement i s

l i mi t ed onl y t o one or mor e of t he f ol l owi ng:

( a) a s t at ement t hat t he i s suer i s conduct i ng an

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of f er i ng i n r el i ance on t he exempt i on under t hi s

subsect i on T;

( b) t he name and web addr ess of a qual i f i ed

I nt er net por t al ( i f any) c onduc t i ng t he of f er i ng;

( c) t he mi ni mum and maxi mum amount of t he of f eri ng;

or

( d) f act ual i nf or mat i on about t he l egal i dent i t y

and bus i nes s l ocat i on of t he i s suer , l i mi t ed t o: t he

name of t he i s suer ; t he addr es s, phone number , and

websi t e ( i f any) of t he i ssuer ; a one sent ence

descr i pt i on of t he busi ness of t he i ssuer ; or t he

c ont ac t i nf or mat i on of a r epr e sent at i ve of t he i s suer .

( 14) The i s s uer ( and t o t he ext ent a qual i f i ed I nt er net

por t al i s us ed, t he ent i t y mai nt ai ni ng s uch qual i f i ed

I nt er net por t al ) r eas onabl y bel i eves t hat al l pur c has er s

ar e pur chasi ng f or i nvest ment and not f or sal e i n

c onnec t i on wi t h a di s t r i but i on of t he s ec ur i t y.

( 15) Unt i l no s ec ur i t i es i s sued under t hi s exempt i on

ar e out s t andi ng, t he i s s uer s hal l pr o vi de quar t er l y t o eac h

pur chaser , f r ee of char ge, i nt er nal l y or account ant

pr epar ed quar t er l y f i nanci al s t at ement s of t he i s suer ,

cer t i f i ed by a seni or of f i cer of t he i ssuer as f ai r l y,

compl et el y and accur at el y pr es ent i ng t he f i nanci al

condi t i on of t he i s suer , i n al l mat er i al r es pect s , as of

t he dat es i ndi cat ed t her ei n. An i s suer may s at i s f y t he

r epor t i ng r egui r ement of t hi s par agr aph ( 15) by maki ng t he


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i nf or mat i on avai l abl e on i t s own webs i t e or t hr ough a

gual i f i ed I nt er net por t al i f t he i nf or mat i on i s made

avai l abl e wi t hi n 45 days af t er t he end of each f i s cal

guar t er , t he i nf or mat i on r emai ns avai l abl e unt i l t he

succeedi ng guar t er l y r epor t i s i ss ued, and t he i s suer

pr o mpt l y al er t s each pur c has er of t he avai l abi l i t y of t he

i nf or mat i on.

( 16) The i s s uer ( and t o t he ext ent a gual i f i ed I nt er net

por t al i s us ed, s uc h gual i f i ed I nt er net por t al ) mai nt ai ns

r e cor ds of al l of f er s and s al es of s ec ur i t i es made pur s uant

t o t he exempt i on gr ant ed by t hi s s ubs ecti on T and pr ovi des

r eady access t o such r ecor ds t o t he Secr et ar y of St at e,

upon r easonabl e pr i or wr i t t en r equest .

( 17) The i s suer i s not , ei t her bef or e or as a r es ul t of

t he of f er i ng:

( a) an i nves t ment company, as def i ned i n Secti on 3

of t he I nves t ment Company Ac t of 1940 ( 15 U. S. C.

BOa- 3) , as amended and i n ef f ect ( unl es s t he i s suer

qual i f i es f or exc l us i on f r o m s uc h def i ni t i on pur s uant

t o one or mor e of t he exc ept i ons pr ovi ded i n Sect i on

3( c) of t he I nves t ment Company Act of 1940, any ot her

pr ovi si on of t he I nvest ment Company Act of 1940, or any

admi ni s t r at i ve r ul e or r e gul at i on pr o mul gat ed wi t h

r es pec t t o t he I nves t ment Company Act of 1940 or i n

connecti on t her ewi t h) j or

( b) subj ect t o t he r epor t i ng r equi r ement s of


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1 Sect i on 13 or l 5( d) of t he Secur i t i es Exchange Act of

2 1934 ( 15 U. S. C. 78m or 15 U. S. C. 780(d).

3 ( 18) Nei t her t he i ssuer , nor any per son af f i l i at ed wi t h

4 t he i ssuer ( ei t her bef or e or as a r esul t of t he of f er i ng) ,

5 nor t he of f er i ng i t s el f , nor t he gual i f i ed I nt er net por t al

6 ( t o t he ext ent used) i s subj ect t o di sgual i f i cat i on

7 es t abl i s hed by t he Secr et ar y of St at e by r ul e or cont ai ned

8 i n t he Secur i t i es Act of 1933 ( 15 U. S. C. 77c( a) ( 11) ) and

9 Rul e 147 adopt ed under t he Secur i t i es Act of 1933 ( 17 CFR

10 230. 147) , unl es s bot h of t he f ol l owi ng ar e met :

11 ( a) on a showi ng of good cause and wi t hout

12 pr ej udi ce t o any ot her act i on by t he Secr et ar y of

13 St at e, t he Secr et ar y of St at e det er mi nes t hat i t i s not

14 neces sar y under t he ci r c ums t ances t hat an exempt i on i s

15 deni ed; and

16 ( b) t he i ssuer est abl i shes t hat i t made a f act ual

17 i ngui r y i nt o whet her any di sgual i f i cat i on exi st ed

18 under t hi s par agr aph ( 18) , but di d not know, and i n t he

19 exer c i se of r eas onabl e car e coul d not have known, t hat

20 a di sgual i f i cat i on exi st ed under t hi s par agr aph ( 18) ;

21 t he nat ur e and scope of t he r egui si t e i ngui r y wi l l var y

22 based on t he ci r cumst ances of t he i ssuer and t he ot her

23 of f er i ng par t i ci pant s.

24 ( Sour c e: P. A. 90- 70, ef f . 7- 8- 97; 91- 809, ef f . l ~l - Ol . )

25 ( 815 I LCS 5/ 8d new)


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1 Sec. 8d. Of f er i ngs made t hr ough gual i f i ed I nt er net

2 por t al s . An i s suer may make an of f er i ng or s al e of s ec ur i t i es

3 pur s uant t o s ubs ect i on T of Sect i on 4 of t hi s Act t hr ough t he

4 us e of one or mor e gual i f i ed I nt er net por t al s , s ubj ect t o t he

5 following:

6 ( a) The I nt er net por t al shal l at al l t i mes be owned by

7 a cor por at i on or ot her l egal ent i t y whi ch i s ei t her

8 or gani zed under t he l aws of , or i s ot her wi s e gual i f i ed t o

9 do bus i nes s i n, t hi s St at e and t he ent i t y s hal l be i n good

10 st andi ng i n t hi s St at e as of t he dat e of t he pr oposed

11 of f er i ng of secur i t i es.

12 ( b) The I nt er net por t al shal l est abl i sh and mai nt ai n

13 commer ci al l y r eas onabl e meas ur es t o l i mi t ac ces s t o any

14 i nf or mat i on concer ni ng an of f er or sal e of t he subj ect

15 s ecur i t i es ( ot her t han i nf or mat i on per mi t t ed of t he t ype

16 per mi t t ed i n connec t i on wi t h a gener al announc ement by t he

17 i ssuer pur suant t o par agr aph ( 13) of subsect i on T of

18 Sect i on 4) t o onl y r esi dent s of t hi s St at e. Wi t hout

19 l i mi t i ng t he gener al i t y of t he f or egoi ng, and not t o t he

20 excl usi on of ot her r easonabl e met hods whi ch may be ut i l i zed

21 by t he I nt er net por t al i n connect i on wi t h t he f or egoi ng, an

22 I nt er net por t al may r el y:

23 ( i ) f or pur poses of access t o of f er i ng mat er i al s i n

24 connect i on wi t h a pr oposed of f er i ng, a r epr esent at i on

25 s i gned, i n wr i t i ng or el ect r oni cal l y, by an i ndi vi dual

26 pr ospect i ve pur chaser , or ver i f i cat i on ( i ndependent l y


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(c)

( dur i ng

por t al )

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or by a t hi r d- par t y) of t he st at e of or i gi nat i on of t he

pur chaser ' s I nt er net Pr ot ocol ( I P) addr ess, f or

pur pos es of es t abl i s hi ng s uch pur chas er ' s r es i dence,

pr ovi ded t he ent i t y mai nt ai ni ng t he I nt er net por t al

has no knowl edge, or ot her r eas on t o bel i eve, t hat t he

i ndi vi dual pur c has er i s not a r es i dent of t he St at e;

and

( i i ) i n connecti on wi t h an actual pur chas e and s al e

of a secur i t y pur s uant t o a pr oposed of f er i ng, on a

copy of a val i d dr i ver ' s l i cense ( or t hi r d- par t y

ver i f i cat i on bas ed on a pur c has er ' s val i d dr i ver ' s

l i cens e i nf or mat i on) , or ver i f i cat i on ( i ndependent l y

or by a t hi r d- par t y) of t he st at e of or i gi nat i on of t he

pur chaser ' s I nt er net Pr ot ocol ( I P) addr ess, f or

pur pos es of es t a bl i s hi ng an i ndi vi dual pur c has er ' s

r esi dence, pr ovi ded t he ent i t y mai nt ai ni ng t he

I nt er net por t al has no knowl edge, or ot her r eas on t o

bel i eve, t hat t he i ndi vi dual pur chaser i s not a

r es i dent of t he St at e.

The I nt er net por t al shal l est abl i sh and mai nt ai n

t he t i me t he of f er i ng appear s on t he I nt er net

a s ecur e met hod of communi c at i on t hr ough t he

I nt er net por t al i t s el f t hat wi l l per mi t pot ent i al

i nvest or s t o communi cat e wi t h one anot her and wi t h

r e pr es ent at i ves of t he i s s uer abbut t he of f er i ng. Fur t her ,

t he f or egoi ng communi cat i ons mus t be made vi s i bl e and


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accessi bl e ( at al l t i mes dur i ng t he t i me t he of f er i ng

appear s on t he I nt er net por t al ) t o al l t hos e wi t h acces s t o

t he of f er i ng mat er i al s of i s suer .

( d) The I nt er net por t al s hal l es t a bl i s h and mai nt ai n a

secur e met hod of communi cat i on t hr ough t he I nt er net por t al

i t s el f t hat wi l l per mi t t he i ssuer and pur chaser s t o

communi cat e wi t h one anot her.

( e) The I nt er net por t al :

( 1) s hal l be a r egi s t er ed br oker - deal er under t he

Secur i t i es Exchange Act of 1934 ( 15 U. S. C. 780) ;

( 2) s hal l be a f undi ng por t al r egi s t er ed under t he

Secur i t i es Act of 1933 ( 15 U. S. C. 77d- 1) and t he

Secur i t i es and Exchange Commi ssi on has adopt ed r ul es

under aut hor i t y of Sect i on 3( h) of t he Secur i t i es

Exchange Act of 1934 ( 15 U. S. C. 78c) and Secti on 304 of

t he J umps t ar t Our Bus i nes s St ar t ups Act ( P. L. 112- 106)

gover ni ng f undi ng por t al s;

( 3) s hal l be a deal er or an i nves t ment advi s or

r egi s t er ed and i n good s t andi nq under t hi s Act as of

t he dat e of any of f er or sal e of secur i t i es made

t hr o ugh t he I nt er net por t al ; or

( 4) shal l , t o t he ext ent i t meet s t he

qual i f i cat i ons f or exempt i on f r om r egi st r at i on

pur s uant t o s ubs ec t i on ( g) of t hi s Sec t i on:

( A) f i l e, not l at er t han 30 days bef or e t he

dat e of t he f i r s t of f er or s al e of s ecur i t i es made


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wi t hi n t hi s St at e, an appl i cat i on f or

qual i f i c at i on ( or r enewal of qual i f i c at i on, as

appl i cabl e) as a qual i f i ed I nt er net por t al wi t h

t he Secret ar y of St at e, i n wr i t i ng or i n el ect r oni c

f or m as pr escr i bed by t he Secr et ar y of St at e, whi ch

t he Secret ar y of St at e shal l make avai l abl e as an

el ec t r oni c doc ument on t he Sec r et ar y of St at e' s

I nt er net websi t e, cont ai ni ng such i nf or mat i on and

r egui r ed del i ver i es as speci f i ed t her ei n; and

( B) pay t he appl i cat i on f i l i ng f ee est abl i shed

under Sect i on l l a of t hi s Act ; t he Secr et ar y of

St at e shal l , wi t hi n a r easonabl e t i me, exami ne t he

f i l ed appl i cat i on and ot her mat er i al s f i l ed and,

unl ess t he Secr et ar y of St at e not i f i es t he

I nt er net por t al of t he r ej ect i on of such

appl i cat i on ( or r enewal appl i cat i on, as

appl i cabl e) on or bef or e t he i ni t i al commencement

dat e of t he of f er i ng, t he I nt er net por t al s hal l be

deemed t o be a gual i f i ed I nt er net por t al f or

pur poses of t hi s Act .

( f ) I f any change occur s i n t he i nf or mat i on submi t t ed

by, or on behal f of , an I nt er net por t al t o t he Sec r et ar y of

St at e, an I nt er net por t al s hal l not i f y t he Secr et ar y of

St at e wi t hi n 30 days af t er such change occur s and shal l

pr ovi de t he Secr et ar y of St at e wi t h s uch addi t i onal

i nf or mat i on ( i f any) r eguest ed by t he Secretary of St at e i n


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( 6) I t does not of f er i nvest ment advi ce or

r ec ommendat i ons ; however , an I nt er net por t al i s not

deemed t o be of f er i ng i nvest ment advi ce or

r ecommendat i ons si mpl y by vi r t ue of :

( A) sel ect i ng t r ansact i ons i n whi ch t he

I nt er net por t al s hal l s er ve as an i nt er medi ar y;

( B) es t abl i s hi ng r eas onabl e s el ecti on cr i t er i a

f or an i ssuer t o meet i n or der t o est abl i sh an

of f er or sal e of secur

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