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(h) Because this exemption permits limited use advertisements,
use of this exemption under certain circumstances could result in
other exemptions not being available for other sales due to prohibitions
in such exemptions against public solicitation and advertisements.
Therefore, issuers or registered dealers who use this exemption should
take all necessary steps to document that any sales to persons who
are not individual accredited investors, as defined, were not made
in response to a limited use advertisement. Users of this section
should consult with experienced securities counsel, especially if
they anticipate selling, within six months of the last sale made under
this section, to any persons who are not individual accredited investors.
(i) The use of a limited use advertisement in compliance
with this section and in connection with sales under this section
will not render exemptions that prohibit public solicitation or advertisements
unavailable to sales that are made more than six months after the
use of the limited use advertisement.
(j) Should the offer and sale of securities fail, for
any reason, to comply with all the terms and conditions for use of
this section, the issuer may claim the availability of any other applicable
exemption. A limited use advertisement that results in an offer to
a person who is not an individual accredited investor within the meaning
of this section does not alone result in loss of the exemption.
(k) Investment intent; resales. The issuer and any
person acting on its behalf shall exercise reasonable care to assure
that the purchasers are acquiring the securities as an investment.
Such reasonable care should include, but not be limited to, the following:
(1) having reasonable grounds to believe and, after
making reasonable inquiry, believe that the purchaser is acquiring
the securities with investment intent for his or her own account or
on behalf of other persons and not for resale or with a view toward
distribution;
(2) placing a legend on the certificate or other document
evidencing the securities to the effect that the securities have not
been registered under any securities law and setting forth or referring
to the restrictions on transferability and sale of the securities;
(3) issuing stop transfer instructions to the issuer's
transfer agent, if any, with respect to the securities, or, if the
issuer transfers its own securities, making a notation in the appropriate
records of the issuer; and
(4) obtaining from the purchaser a signed written agreement
to the effect that the securities will not be sold without registration
under applicable securities laws or exemptions therefrom.
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| Source Note: The provisions of this §139.16 adopted to be effective April 21, 1995, 20 TexReg 2622; amended to be effective December 27, 1995, 20 TexReg 10593; amended to be effective July 14, 2005, 30 TexReg 3990; amended to be effective January 8, 2006, 30 TexReg 8869; amended to be effective June 21, 2011, 36 TexReg 3715; amended to be effective November 8, 2012, 37 TexReg 8787 |
