| (C) is subject to any order, judgment, or decree entered
within five years prior to commencement of the offering by any court
of competent jurisdiction which temporarily or permanently restrains
or enjoins such person from engaging in or continuing any conduct
or practice in connection with the purchase or sale of any security
or involving any false filing with any state; or which restrains or
enjoins such person from activities subject to federal or state statutes
designed to protect consumers against unlawful or deceptive practices
involving insurance, commodities or commodity futures, real estate,
franchises, business opportunities, consumer goods, or other goods
and services.
(3) The prohibitions of subparagraphs (A) - (C) of
paragraph (2) shall not apply if the party subject to the disqualifying
order is duly licensed to conduct securities-related business in the
state in which the administrative order or judgment was entered against
such party or, if the order or judgment was entered by federal authorities,
the prohibitions of subparagraphs (A) - (C) of paragraph (2) shall
not apply if the party subject to the disqualifying order is duly
licensed to conduct securities-related business by the Securities
and Exchange Commission. Any disqualification caused by paragraph
(2) is automatically waived if the state or federal authorities which
created the basis for disqualification determine upon a showing of
good cause that it is not necessary under the circumstances that the
exemption be denied.
(4) For purposes of paragraphs (2) and (3) only, "issuer"
includes any directors, executive officers, general partners, or beneficial
owners of 10% or more of any class of its equity securities (beneficial
ownership meaning the power to vote or direct the vote and/or the
power to dispose or direct the disposition of such securities), and
"registered dealer" shall include any partners, directors, executive
officers, or beneficial owner of 10% or more of any class of the equity
securities of the registered dealer (beneficial ownership meaning
the power to vote or direct the vote and/or the power to dispose or
direct the disposition of such securities).
(5) Upon application, and for good cause shown, the
Commissioner may waive a disqualification contained in paragraph (2).
(6) The offering complies with subsections (a) - (d)
and (j) of this section. However, persons who are "accredited investors"
as defined in §107.2 of this title are deemed to be "sophisticated"
as defined in subsection (a)(2) of this section.
(7) This subsection may not be combined with the Securities
Act, §5.I(a) or §5.I(c), or subsection (k) of this section
to make sales to more than 35 unaccredited security holders during
a 12-month period. Except for accredited investors who became security
holders pursuant to this subsection, security holders who purchase
in sales made in compliance with this subsection are included in the
count of security holders under §5.I(a) or purchasers under §5.I(c),
but this subsection may be used to exceed the numbers of security
holders or purchasers allowed by such sections over an extended period
of time.
(8) Issuers who offer and sell securities under this
subsection only through a securities dealer registered in Texas may
do so without filing any notice with the State Securities Board.
(9) Notice filing requirements.
(A) An issuer who is not a registered securities dealer
and who does not sell securities by or through a registered securities
dealer shall file a notice on Form 133.29 not less than 10 business
days before any sale claimed to be exempt under this subsection may
be consummated for sales under paragraph (1)(B) of this subsection,
in whole or in part to individual accredited investors, as defined
in §107.2 of this title.
(B) For the purpose of filing Form 133.29, "business
days" means ordinary business days and does not include Saturdays,
Sundays, or state holidays.
(C) No notice is required for sales made under paragraph
(1)(A) of this subsection or under paragraph (1)(B) of this subsection
where the sales are made exclusively to institutional accredited investors
as defined in §107.2 of this title.
(D) The issuer may be required by the Securities Commissioner
to give details concerning any information requested in Form 133.29
and may be required to furnish any additional information deemed necessary
by the Securities Commissioner to determine the issuer's business
repute and qualifications.
(E) Every issuer filing a notice on Form 133.29 shall
pay a filing fee of 1/10 of 1.0% of the aggregate amount of securities
described as being offered for sale, but in no case more than $500.
(10) Accredited investor security holders who purchase
in sales made under this exemption are not counted as security holders
under §5.I(a) or purchasers under §5.I(c) in determining
whether any other sales to other security holders or purchasers are
exempt under §5.I. That is to say, this exemption for sales to
accredited investors is cumulative with and in addition to the exemptions
contained in §5.I, and sales made under paragraph (1)(B) of this
subsection are not considered in determining whether sales made in
reliance on the exemptions contained in §5.I would be within
the numerical limits on the number of security holders or purchasers
contained in §5.I.
(11) "Accredited investor" is defined in §107.2
of this title and for purposes of this subsection, includes any person
who the issuer reasonably believes comes within that definition at
the time of the sale of the securities to that person.
|
| Source Note: The provisions of this §109.13 adopted to be effective March 1, 1985, 10 TexReg 569; amended to be effective August 29, 1985, 10 TexReg 2999; amended to be effective April 8, 1986, 11 TexReg 1508; amended to be effective March 10, 1987, 12 TexReg 601; amended to be effective January 1, 1988, TexReg 4470; amended to be effective October 31, 1988, 13 TexReg 4851; amended to be effective November 29, 1989, 14 TexReg 6076; amended to be effective November 15, 1990, 15 TexReg 6290; amended to be effective June 8, 1994, 19 TexReg 4195; amended to be effective August 3, 1995, 20 TexReg 5381; amended to be effective April 8, 1997, 22 TexReg 3218; amended to beeffective March 14, 1999, 24 TexReg 1769; amended to be effective August 12, 2001, 26 TexReg 5788; amended to be effective June 12, 2002, 27 TexReg 4934; amended to be effective June 21, 2011, 36 TexReg 3715; amended to be effective February 5, 2014, 39 TexReg 492; amended to be effective December 23, 2018, 43 TexReg 8088; amended to be effective November 12, 2019, 44 TexReg 6858 |
